Lenders to GMR, a subsidiary of Bangalore-based GMR Infrastructure, have written to the Maldives government seeking protection of their interests in the $511 million airport deal, which was cancelled by the island nation.
The lenders’ agreement with the Maldives government is separate from the deal Maldives signed with GMR.
The lenders are open to arbitration proceedings should they be necessary. Axis Bank is the syndicator and lead underwriter to the $511 million project, which has a debt component of $358 million.
GMR said it has actually invested $220 million in the project so far.
GMR won a 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 deal with the GMR was signed under former president Mohamed Nasheed's administration, following a competitive bidding process conducted by the World Bank's International Finance Corporation (IFC).
The project was implemented through a joint venture company comprising GMR Infrastructure Limited and Malaysia Airports Holding Bhd.
The deal has reportedly been cancelled because the contract contained a $25 airport development charge per outgoing passenger which was not authorised by parliament.
The cancellation raises concerns over investor protection in the Maldives, which is seeking foreign financing of tourism projects, and follows a year of political turmoil, with the ousting of a president and months of unrest.
India said the move sends a "very negative signal to foreign investors and the international community".
A legal arbitration over the deal is currently going in the Singapore High Court, but it is not clear whether the Singapore arbitration case will continue after the Maldives nullified the contract.
GMR told NDTV yesterday that it wants to continue airport operations in Maldives despite the island nation's decision to cancel the deal.
"We are fairly confident that we will seek and get legal remedy," Arun Bhagat, the head of corporate communications at GMR Group, told NDTV.
"We had signed a contract for 25 years... There is another 23 years to stay here. We are bringing the largest FDI to this country and there is no reason why we should not stay on," he added.
Mr Bhagat said the company has received the termination letter from the Maldives government, but the company will seek a stay order against the notice.