GMR seeks nod for buying out partner's stake in MRO facility
Jul 23 2014 , Hyderabad
The decision to acquire the stake came after the Malaysian partner expressed inability to infuse more funds into the loss making MRO facility, sources said.
The Malaysian Aerospace Engineering (MAE) has informed that its parent company Malaysia Airlines Systems has been incurring losses for the past few years. The losses have been further aggravated by the mysterious disappearance of flight MH370, the sources said.
The MRO facility being operated under the name of MAS GMR Aerospace Engineering Company Ltd (MGAECL) was set up at an investment of around Rs 350 crore.
It is a fully-owned subsidiary of MAS GMR Aerospace Engineering Co (MGAE), while MGAE itself is a 50:50 joint venture partnership between Malaysian Aerospace Engineering (MAE) and GMR Hyderabad International Airport (GHIAL).
MGAECL has made representations to the Board of Approvals ( BoA), Ministry of Commerce, seeking clearance for the stake purchase and renaming the unit, sources said.
A decision with respect to the request made by GMR is expected to be taken up in a meeting scheduled for tomorrow by BoA, they added.
When contacted, a GMR spokesperson declined to comment.
MGAECL started its commercial operations in November, 2011. During the last three years, the company has incurred cumulative losses of Rs 240.30 crore as on March 31, 2014.
The promoters have been mostly funding for the operations.
After the acquisition of equity from MAE, GHIAL will hold 100 per cent equity of MAS GMR Aerospace Engineering Ltd and the name will be changed from MAS GMR Aerospace Engineering Company Ltd to GMR Aerospace Engineering Company Ltd, sources said.