GMR-Megawide reaches financial closure for Philippines airport project

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SME Times News Bureau | 23 Dec, 2014
GMR-Megawide Cebu Airport Corporation (GMCAC), a joint venture between GMR Infrastructure Ltd and Megawide Construction Corporation, has achieved financial closure for Mactan Cebu International Airport located in Philippines' Cebu.

The total project cost is Philippine pesos 33 billion (approximately $750 million), 70 percent of which will be financed by a consortium of six banks.

BDO Capital & Investment Corporation acted as lead arranger to the transaction, a statement by GMR said Monday.

Total equity contribution of GMR will be approximately $90 million. GMR, which holds 60 percent in the joint venture, has already invested $48 million and do not envisage any further investment in the near future.

GMCAC will be responsible for construction, development, renovation, expansion and operation of the Mactan Cebu International Airport for a period of 25 years as provided in the concession agreement.

MCIA is the first airport in Philippines to be privatized under the administration's ambitious public private partnership programme aimed at modernizing key infrastructure assets.

In the international competitive bidding process, GMR-Megawide Consortium had emerged as the highest bidder after offering a bid premium of 14.4 billion Philippine Pesos (approximately $305 million).

The formal award of the project in April was followed by a six-month transition period to complete project formalities leading to the transfer of operations to GMCAC on Nov 1, 2014.

"GMR Group has proven credentials in airport operations and modernization and we are confident that we will undertake this prestigious project in a timely manner and deliver an airport that Cebuanos and Filipinos will be proud of," said G.M. Rao, chairman, GMR Infrastructure Ltd.