Hong Leong Investment Bank (HLIB) Research, which has a buy call on Malaysia Airports Holdings Bhd (MAHB), is positive on the disposal of its 11 per cent interest in an Indian airport.
Yesterday, MAHB announced that it is selling its entire 11 per cent stake in India’s GMR Hyderabad International Airport Limited (GHIAL), to the GMR Group for US$100 million (RM478.85 million).
“We are overall positive with the disposal exercise, in allowing MAHB to monetize its investment and utilize the cash proceeds for the intended capital expenditure cycle of domestic airports,” HLIB Research said.
Since the acquisition, the MAHB has maintained a passive minority interest in the venture.Since the opening of the airport in 2008, MAHB has only received US$6.41million of dividend from GHIAL.
HLIB Research has an unchanged target price of RM8.50 for MAHB’s shares.
MAHB is expected to realise a gain of US$23.7 million from the sale.
“The proceeds of RM478.9 million is intended to be utilised for MAHB going forward capital expenditure in assets where it holds a more direct and controlling stake.”
The overall exercise is expected to be completed by 1QFY24,” it said in a note today.
With the sale of its interest in GHIAL, MAHB is left with its Turkish asset, Istanbul Sabiha Gokcen International Airport, which it fully owns.