Adani Group, led by Gautam Adani, has acquired 74% of the shares of Mumbai International Airport Limited (MIAL), which operates India’s second largest airport in Mumbai.
Under the transaction, Adani Group will acquire 50.5% of the shares of the GVK group. In addition, Adani will also acquire 23.5% of the shares of minority partners Airport Company of South Africa (ACSA) and Bidvest. ACSA and Bidvest own a 10% and 13.5% stake, respectively, in MIAL.
GVK had moved the court to block the sales attempts claiming they are entitled to the first refusal. However, the company has been unable to raise funds.
With six airports already in kitty, this will make the group the second largest operator of private airports after the GMR group which operates Delhi and Hyderabad airports.
GVK Group and Adanis have agreed that Adani will offer a stand-still to GVK, in addition to the release of the guarantee granted by GVK Power and Infrastructure Limited in respect of the debt acquired by it.
ALSO READ: Navi Mumbai Airport Stuck For Take Off With New Infusion Of Adani Funds
“Adani Airport Holdings Limited intends to inject funds into MIAL to ensure MIAL receives much-needed liquidity and also achieves the financial closure of Navi Mumbai Airport,” the company said in a statement.
The deal has been closed despite a legal challenge by a consortium of foreign investors that had previously signed a binding agreement with the GVK group to buy the asset.
The consortium led by the UAE sovereign wealth fund Abu Dhabi Investment Authority (ADIA), the Indian sovereign wealth fund IFRS and Public Sector Pension (PSP) Investments of Canada have provided a legal notice to the GVK group and the lenders saying that to sell participation in Mumbai International Airport Limited (MIAL) to the Adani group will constitute a breach of the agreement they had entered into in October 2019.
The acquisition will also give Adanis ownership of the upcoming Navi Mumbai airport in which MIAL has a 74 percent stake.
“There was immense pressure from the lenders on the GVK group as there were upcoming MIAL debt repayment schedules. Banks were particularly concerned because they felt that the poor liquidity position of the parent company, compounded by the effect of the coronavirus on the airport business, will make it difficult to meet payments. The transaction is positive for everyone, ”said a banker involved in the process. He said that GVK’s entire stake in MIAL is committed to HDFC Bank and YES Bank.
Under the agreement, Adani Group will acquire GVK’s debt from the lenders.
Adani Group has publicly disclosed its plans to become ‘India’s leading airport operator’, something it also stated in its annual report for fiscal year 2020. It also stated in the annual report that the growing domestic passenger traffic is delivering an immense opportunity to expand and expand your business.
.
