Fairfax India Holdings Corporation and Fairfax Financial Holdings Limited will collectively acquire 33% of the equity of Bangalore International Airport Limited from Bangalore Airport & Infrastructure Developers Private Limited, a wholly-owned subsidiary of GVK Power and Infrastructure Limited.

The deal will be closed for an aggregate investment of approximately Rs.21.49 billion (US$324 million). The transaction is subject to customary closing conditions and third party consents, including lender consents, and is expected to be completed by the middle of 2016.

On completion of the deal, GVK Power and Infrastructure will use the funds to reduce its debt by Rs.20 billion and its interest costs will drop by some Rs.3 billion a year. The transaction will reduce GVK’s stake in the airport to 10%.

Bangalore International Airport Limited (BIAL) owns and operates the Kempegowda International Airport Bengaluru (KIAB), under a 30+30 year concession agreement from the Government of India. KIAB has the distinction of being the first airport in India that was built to the highest international standards by the private sector under the public-private partnership (PPP) model.

Prem Watsa, Chairman of Fairfax India, and Chairman and CEO of Fairfax, stated:

"We have great admiration for GVK, led by Dr. GVK Reddy and G V Sanjay Reddy, in the outstanding work that they have done to develop Kempegowda International Airport to its current stature. This is a partnership between Fairfax and GVK. Going forward, we will work closely with all stakeholders to manage our stake in BIAL and will support G V Sanjay Reddy to continue to lead the management team as Managing Director (MD) of BIAL. While it is already a great facility, we are looking forward to its long-term expansion, to make it a vital infrastructure resource that will help drive India's economic growth. The state of Karnataka is a major hub for tourism and commerce, and this airport serves as the gateway for leisure and business travellers alike."

"We also look forward to working with the esteemed governments of India and Karnataka and our other new partners, Zurich International Airport and Siemens under the able supervision of the Indian Ministry of Civil Aviation and the Indian Regulator, Airports Economic Regulatory Authority ("AERA")."

Dr. GVK Reddy commenting on this development said,

"This is an important and successful milestone in deleveraging our balance sheet and all proceeds from this stake sale shall be used to bring down our debt obligations to our lenders. We chose Fairfax as a partner in BIAL as we have a long standing relationship with Mr. Prem Watsa and we would look forward to partnering with them in developing Kempegowda International Airport through its next stage of expansion as we develop a new world-class Terminal 2 and a new runway".