The Singapore High Court has stayed the termination of a $511 million airport contract that the GMR group was executing in Maldives, enabling the company to continue operations at the Male airport.
Shares in GMR Infra shot up nearly 6 per cent after the news. At 11.29 a.m. the stock traded 5.65 per cent higher at Rs 19.65 on the National Stock Exchange outperforming the broader Nifty that traded 0.22 per cent lower at 5,867.
Last week, Maldives had cancelled the airport development deal with GMR, a subsidiary of Bangalore-based GMR Infrastructure. The deal had reportedly been cancelled because the contract contained a $25 airport development charge per outgoing passenger which was not authorised by the Maldives parliament.
The cancellation of the deal signed in 2010 followed President Mohamed Waheed's failure to renegotiate terms, sources close to president's office had told Reuters last week.
GMR had won the contract in 2010 to upgrade and operate the Maldives airport and build a new terminal after a global tender overseen by the World Bank. The company, which has invested $220 million in the project so far, had earlier told NDTV that it wanted to continue airport operations in Maldives.
The cancellation had raised concerns on investor protection in the Maldives, which is seeking foreign financing of tourism projects, and follows a year of political turmoil, with the ouster of a president and months of unrest.
India's foreign ministry had said the cancellation move sent a "very negative signal to foreign investors and the international community".
(With inputs from Thomson Reuters)