Adani’s move to buy a minority stake in MIAL was widely seen as a tactic to wrest control of one of India’s busiest airports from GVK
Adani has been in exploratory talks with GVK’s lenders to potentially buy the pledged shares
The Bombay high court (HC) on Wednesday declined to entertain a plea by Adani Properties, seeking to restrain South Africa’s Bidvest Group Ltd from selling its minority stake in Mumbai International Airport Ltd (MIAL) to a third party, and extending a payment deadline for buying the stake.
In April, Bidvest agreed to sell its 13.5% stake in MIAL to Adani Properties for ₹1,235 crore by 30 September. However, Adani Properties later approached the high court seeking its intervention to extend the payment deadline to 7 February 2020 and also prevent Bidvest from selling its stake to a third party in the interim.
Adani’s move to take a minority stake in MIAL was widely seen as a “foot in the door" tactic to wrest control of India’s second-busiest airport from GVK, which has pledged a large portion of its controlling stake in MIAL with various lenders.
Adani, according to people aware of the matter, has been in exploratory talks with GVK’s lenders to potentially buy the pledged shares.
MIAL is a joint venture between GVK-led consortium of Bidvest and Airports Co. of South Africa Ltd (ACSA), and the state-run Airports Authority of India (AAI).
GVK controls 50.5% of MIAL’s shareholding, while AAI owns 26% and the remaining 23.5% is split between the two foreign partners—Bidvest and ACSA, which has a 10% stake.
Bidvest had signed the share purchase pact with Adani Properties after controlling shareholders GVK Group and AAI failed to exercise their right of first refusal to buy the stake.
GVK was interested in picking up the 13.5% stake but could not arrange for the funds on time, missing the original payment deadline of 4 April. Following this, Bidvest moved the arbitration tribunal, which gave GVK time until October-end to make the payment. Alongside, the tribunal also restrained Bidvest from selling its shares to any party until 24 November, preventing both GVK and Adani from making an immediate move.
On 27 October, GVK Power & Infrastructure Ltd signed definitive agreements to raise ₹7,614 crore from Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board (PSP Investments), and the government-backed National Investment and Infrastructure Fund (NIIF) by divesting promoter stake in the group’s holding company. GVK has said it will use the proceeds from the deal to retire debt of its holding companies and also fund the purchase of more shares in MIAL from Bidvest and ACSA.
While the Adani group can appeal Wednesday’s decision in a division bench of the high court, Mint’s emailed queries to the group on its next move did not elicit any response immediately.
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