Bengaluru, March 28 : Infrastructure major GVK on Monday announced selling 33 percent of its stake in the Bangalore International Airport Ltd (BIAL) to Canadian investment firm Fairfax for Rs.2,149 crore ($321 million).

\"The transaction will reduce our debt obligation by Rs.2,300 crore, including interest cost, as our group total debt burden is Rs.25,000 crore,\" the Mumbai-based company said in a statement here.

The transaction is expected to be completed by middle of this year.

BIAL, which operates the Kempe Gowda international airport at Devanahalli, about 40 km from here, is a public-private consortium, with central and Karnataka governments holding 13 percent each equity stake, while GVK Airport Developers has 43 percent, Siemens Project Ventures GmbH of Germany 26 percent and Flughafen Zurich AG of Switzerland 5 percent.

GVK Power & Infrastructure Ltd\'s subsidiary Bangalore Airport & Infrastructure Developers Ltd acquired 17 percent equity stake of L&T Infrastructure Development Projects Ltd and 12 percent stake of Zurich airport in 2009-10 and 14 percent from Siemens in 2011-12 to increase its overall stake to 43 percent.

The state-run Airport Authority of India (AAI) represents the central government and state-run Karnataka State Industrial Investment Development Corporation (KSIIDC) represents the state government.

Fairfax financial holdings group is headed by Canadian investor Prem Watsa.

\"The disinvestment will deleverage our balance sheet as its proceeds will go to lenders,\" said GVK group chairman and managing director G.V.K. Reddy.

As the first PPP greenfield project, BIAL operates the country\'s third business airport under a 30+30 year concession agreement, with a capacity to handle around 15-20 million passengers per annum from one terminal.

\"We will partner with Fairfax to expand the airport area with a second terminal and a second runway to handle about 50 million passengers per annum,\" said Reddy.

G.V.K. Reddy and his son G.V. Sanjya Reddy will continue as co-chairman and managing director of the consortium despite diluting their equity holding to 10 percent.

As a leading commercial aviation operator, the GVK group also operates the Chhatrapati Shivaji international airport in Mumbai.

GVK selling 33 percent stake in Bangalore airport to Fairfax