Mumbai: German airport operator AviAlliance, Australia’s AMP Capital and US-based Global Infrastructure Partners (GIP) have submitted non-binding bids to buy a minority stake in Mumbai International Airport Ltd, two people aware of the development said.
The GVK group, which owns 50.5% in the Mumbai airport, plans to sell some of its stake to raise money for its projects. If ongoing discussions are conclusive, the three bidders are expected to submit binding offers in the coming weeks, the persons cited above said. Mumbai airport’s other shareholders are South Africa’s Bidvest Group holding 13.5%, Airports Co South Africa Ltd (10%) and state-run Airports Authority of India with 26%.
“GVK is seeking an enterprise valuation of roughly ₹ 20,000 crore and the discussions are currently centered around the exact quantum of stake that will change hands," said one of the two persons, both of whom spoke under condition of anonymity. “The GVK group is looking to raise around ₹ 6,000 crore and is willing to offload up to 50.5% of its stake in Mumbai airport," said the second person.
Mint reported on 27 August that GVK group was in talks with at least four potential buyers—Singapore’s Changi Airport, AviAlliance, India’s sovereign wealth fund National Investment and Infrastructure Fund (NIIF), and Abu Dhabi Investment Authority (ADIA).
“The others, apart from AviAlliance, are yet to make an offer and have completed due diligence of the asset. AMP Capital and GIP have joined the negotiations later and the initial deadline of 10 September set by Citigroup, which is managing the transaction, was extended," the first person said.
Spokespersons of GIP, AMP Capital and AviAlliance declined to comment. An email query sent to GVK group remained unanswered until press time.
For Düsseldorf-headquartered AviAlliance, which owns and manages airports across the globe, the deal—if it goes ahead—will be its first in India. AMP Capital has been in India for over a decade, while GIP, in April, acquired the infrastructure asset management business from home-grown private equity funds IDFC Alternatives at an undisclosed value to set up its India platform.
Bidvest, which is running a parallel process to sell its 13.5% in Mumbai airport, also hopes to sell its stake to whoever buys GVK’s stake, according to the persons cited above. “Bidvest has appointed investment bank Rothschild to help find a buyer for its stake and had begun the sale process, but it may now choose to wait till GVK’s stake sale is finalized and offer its stake to the same buyer," the second person said.
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GVK’s plan to sell a stake in Mumbai airport is part of its efforts to deleverage and free up cash for new projects such as the ongoing second airport in Mumbai. Mumbai International Airport Ltd runs the Chhatrapati Shivaji International Airport—one of the busiest in India—as a joint venture company.
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Under a 30-year concession, the government has granted Mumbai International Airport Ltd the right to operate, maintain and develop Mumbai’s Chhatrapati Shivaji International Airport.
The airport services the Mumbai metropolitan area. In 2010, GVK acquired a 13.5% stake from Bidvest for around ₹ 650 crore. AAI has the right to buy stakes in Mumbai airport, according to previously agreed terms, before it’s sold to a third party.