Adani Group to accumulate GVK’s 50.5 per cent stake in Mumbai International Airport

New Delhi, August 31

Billionaire Gautam Adani’s Adani Group on Monday mentioned it’s going to purchase GVK’s stake in Mumbai airport to turn into the nation’s largest non-public airport operator, with a cumulative shareholding to 74 per cent.

According to a regulatory submitting, Adani Airport Holdings Ltd (AAHL), the flagship holding firm of Adani Group for its airport enterprise, “has entered into an agreement to acquire the debt of GVK Airport Developers Ltd (ADL)” in Mumbai International Airport Ltd (MIAL), which will probably be transformed into fairness stake.

This conversion would result in Adani Group getting all of 50.5 per cent stake of GVK Group.

The group can even purchase one other 23.5 per cent of minority companions, Airports Company South Africa (ACSA), and Bidvest Group.

“The GVK Group and AAHL have agreed that AAHL will offer a stand-still to GVK, in addition, to release the guarantee given by GVK Power and Infrastructure Ltd with respect to the debt acquired by it,” the corporate mentioned within the submitting.

Adani Group mentioned it’s going to additionally “take steps to complete the acquisition of a 23.5 per cent equity stake from ACSA and Bidvest in MIAL for which it has obtained Competition Commission of India (CCI) approval.”       

“Upon the acquisition of the debt of GVK ADL, Adani Group will take steps to obtain necessary customary and regulatory approvals, as may be required, to acquire controlling interest in MIAL,” it mentioned.

In a separate submitting, GVK mentioned it has “agreed to cooperate with Adani Airport Holdings Ltd (AAHL)” below which the Adani Group agency will purchase debt from varied lenders together with a Goldman Sachs led consortium and HDFC.

This debt will probably be transformed to fairness at mutually agreed phrases, it mentioned.

The two corporations didn’t give particulars of the monetary phrases.

Adani mentioned it’s going to infuse funds into MIAL in addition to assist obtain monetary closure of Navi Mumbai International Airport in order to begin its development. MIAL holds 74 per cent curiosity within the airport.

GVK Reddy, founder and Chairman, GVK mentioned, “The aviation trade has been severely impacted by COVID-19, setting it again by a few years and has impacted the financials of Mumbai International Airport Ltd.

“It was therefore important, that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL, as well as to help achieve financial closure of the Navi Mumbai International Airport project, which is a project of national importance.”          

“When the transaction is consummated, which is subject to customary approvals, we would be reducing a significant portion of liabilities to our lenders, which is of utmost importance to the group,” he mentioned.

Adani Group had in March 2019 agreed to accumulate 13.5 per cent stake of South African firm, Bidvest for Rs 1,248 crore. However, GVK Group blocked the deal claiming the correct of first refusal.

GVK, nevertheless, couldn’t carry cash to the desk to purchase Bid Services Division Mauritius’ (Bidvest) stake and the matter went to court docket.

With GVK Group’s funds below pressure, it has now come round to the concept of promoting the stake to Adani Group.

After seaports, Adani Group is betting massive on the airports sector and has gained the bids to run six Airport Authority-built non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore.

It has now entered the nation’s second busiest airport.

ACSA owns 10 per cent in MIAL and the steadiness 26 per cent stake is held by the Airports Authority of India (AAI).

In October, debt-laden GVK Group entered into an settlement to promote 79 per cent of its stake in GVK Airport Holdings for Rs 7,614 crore to the Abu Dhabi Investment Authority (ADIA), Canada’s Public Sector Pension (PSP) Investments, and state-owned National Investment and Infrastructure Fund (NIIF).

Proceeds from this transaction have been for use by GVK to primarily retire the debt obligations of its holding firms.

GVK mentioned has “notified ADIA, NIIF and PSP that the transaction documents stand terminated as it is no longer effective and implementable.”               “The reason for this decision was (a) the terms of the transaction envisaged in the transaction documents were not implementable and (b) the alternative proposals discussed would not provide a resolution to the lenders of ADL by the end of August, which was a requirement of our lenders,” it added.

The deal comes after the Central Bureau of Investigation (CBI) earlier this month charged the GVK Group with siphoning off funds totalling Rs 705 crore. It is charged with inflicting a lack of Rs 310 crore to the exchequer by getting into into pretend work contracts on the land given by the federal government to MIAL.

With the six non-metro airports and MIAL, Adani Group will turn into the most important operator of airports aside from state-run AAI, which runs a lot of the airports.

Adani Enterprises in its annual report unveiled its ambition to be the most important non-public airport developer within the nation by growing world-class infrastructure at airports, each at airside and landside, enhancing the passenger expertise, creating leisure locations (airport village, inns, and malls).

To obtain the purpose, it additionally plans to extend home airline connectivity to new and under-served locations, and likewise increase the variety of flights to long-haul locations within the west and likewise to south-east Asia. PTI

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