Shares of GVK Power & Infrastructure rallied over 10 per cent on Monday after its board approved selling 33 per cent stake in the Bangalore International Airport, which will reduce its debt to the extent of Rs 2,000 crore and result in an interest savings of Rs 300 crore annually.
"Board of directors of our company, at its meeting held today (Monday) has approved the sale of 33 per cent stake in Bangalore International Airport to FIH Mauritius Investments and Fairfax India Holdings Corporations for a consideration of Rs 2,149 crore," GVK Power said in a release to Bombay Stock Exchange.
GVK Power earnings have been weighed down due high level of debt. In the quarter ended December 31, 2015 the company had reported a loss of Rs 279 crore on account of interest payments of Rs 555 crore.
Analysts say the proposed stake sale in the Bangalore Internal Airport will help company reduce its debt and annual interest outgo.
GVK Power shares closed 6 per cent higher at Rs 7.10 apiece compared to 1.46 per cent fall in the broader Sensex.
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