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GMR Airports Netherlands, a step-down subsidiary of GMR Airports, has entered into shareholders' agreement and share subscription agreement for operating the Kualanamu International Airport in Indonesia's Medan.

The company entered into these agreements on Thursday with Angkasa Pura II (AP II), the state-owned enterprise and the bidding authority for the airport. On the same day, the company received the letter of award for the project, GMR Group said in a statement on Friday.

With the signing of the agreement, GMR entered into a 49:51 per cent partnership with AP II.

GMR said it will transform the airport into a western international hub of Indonesia.

"The project scope includes operation, development, and expansion of the airport over a period of 25 years. Kualanamu International Airport is an operating airport with healthy cash flows," it added.

Medan is the fourth largest urban area in Indonesia and is the capital of North Sumatra province, with a population of over 3.4 million.

"Our partnership with Angkasa Pura II (AP II) is testimony to the trust placed in us by the Indonesian government and authorities. We will strive to bring our best to this beautiful and strategic country of ASEAN," GMR Group's Chairman, Energy and International Airports, Srinivas Bommidala, said.