GMR Infrastructure Ltd. (GMRI) may lose control of Male international airport in the Maldives after a Singapore court allowed the island-nation to take over the facility following cancellation of the contract.
The court yesterday set aside its Dec. 3 order preventing Maldives from interfering with the performance of GMR, according to a decision handed out by three judges led by Chief Justice Sundaresh Menon. Maldives plans to run the island’s biggest airport from tomorrow, according to Masood Imad, a spokesman for President Mohamed Waheed.
Maldives may have to compensate GMR in accordance with the agreement between them, according to the court’s decision. Maldives Airport Co., the state-owned airport company, is liable to pay GMR and its lenders more than $700 million in compensation, Sidharath Kapur, chief financial officer of airports at GMR, said Dec. 5.
GMR is not in a position to comment, according to a text message from the company.
GMR shares dropped 1.3 percent to 19.80 rupees at the close in Mumbai yesterday. The stock has fallen 5.7 percent this year, compared with a 32 percent gain in the S&P CNX 500 Index.
The project was awarded to GMR, which also runs India’s biggest airport in New Delhi, and Malaysia Airports Holdings Bhd. (MAHB) in 2010 by then-President Mohamed Nasheed, who was ousted in February. The contract never received the necessary approval from parliament and was signed under “dubious circumstances,” according to Imad. Waheed took power after Nasheed resigned.
Malaysia Airports owns 23 percent of GMR Male International Airport Pvt. and the rest is held by GMR.
GMR moved the Singapore court, the designated arbitrator, after Maldives canceled the contract on Nov. 27.
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