Adani Group to purchase controlling stake in Mumbai International Airport

New Delhi, August 31

Billionaire Gautam Adani’s conglomerate on Monday mentioned it’s going to take controlling stake in Mumbai airport by way of offers through which it’s going to purchase the debt of present promoter GVK and purchase out minority shareholders.

Adani Group will purchase GVK Airport Developers Ltd’s 50.50 per cent stake in addition to buyout 23.5 per cent stake of Airports Company of South Africa (ACSA) and Bidvest Group (for which it has obtained Competition Commission of India approval), it mentioned in a regulatory submitting.

A controlling 74 per cent stake in Mumbai International Airport Ltd (MIAL), along with the six non-metro airports it bagged in a authorities tender, will make Adani Group the most important personal operator of airports in India.

State-run Airports Authority of India (AAI) runs a lot of the airports within the nation.

Adani Airport Holdings will purchase the debt of GVK Airport Developers, the holding firm of GVK Power and Infrastructure, the submitting mentioned.

The debt might be transformed into fairness at mutually-agreed phrases, GVK mentioned in a separate submitting.

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

The two corporations didn’t give particulars of the deal together with the debt that Adani is taking up and the phrases of conversion.

After seaports, Adani Group is betting massive on the airport sector and has received the bids to run six AAI-built non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore. It has now entered the nation’s second busiest airport.

The transfer comes at a time when the COVID-19 pandemic has hit brakes on the aviation sector.

“The aviation industry has been severely impacted by COVID-19, setting it back by many years and has impacted the financials of MIAL,” GVK Chairman GVK Reddy mentioned in an announcement. “It was therefore important that we bring in a financially strong investor in the shortest possible time.”  

GMR Infrastructure is the opposite massive personal airport operator within the nation. GMR, which operates the worldwide airport in New Delhi, can be promoting a 49 per cent stake within the airport enterprise to a consortium led by Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management.

“Mumbai, the City of Dreams! It is a privilege to have an opportunity to serve the air travelers of one of the greatest Metropolis on our planet. #GatewaytoGoodness – Look forward to helping transform the Indian Airport Sector!,” Gautam Adani, 58, tweeted.

GVK additionally mentioned it has individually terminated a Rs 7,614-crore funding settlement with Abu Dhabi Investment Authority (ADIA), Canada’s Public Sector Pension Investment Board and state-owned National Investment & Infrastructure Fund (NIIF).

In October final yr, debt-laden GVK Group had entered into an settlement to promote 79 per cent of its stake in GVK Airport Holdings for Rs 7,614 crore to a few buyers to assist retire debt.

“Adani Airport Holdings intends to infuse funds into MIAL to ensure it receives much-needed liquidity and also achieves financial closure of Navi Mumbai International Airport to be able to commence construction,” Adani Enterprises, the promoter of Adani Airport Holdings, mentioned.

“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.

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

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

“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,” GVK Reddy mentioned.

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

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

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

ACSA owns 10 per cent in MIAL and the stability 26 per cent stake is held by the AAI.

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 totaling Rs 705 crore. It is charged with inflicting a lack of Rs 310 crore to the exchequer by coming into into faux work contracts on the land given by the federal government to MIAL. PTI

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