Mumbai: The GVK group has acquired the entire 10% stake of Airports Co. South Africa (ACSA) Global Ltd in Mumbai International Airport Ltd (MIAL) for ₹924 crore, increasing its total holding in the airport to 74%, it said on Friday.
MIAL runs the Chhatrapati Shivaji International Airport in Mumbai, one of the busiest in India, as a special purpose joint venture company in which GVK initially owned a 50.5% stake, while two South African companies, Bidvest Group and ACSA Gobal Ltd, held 13.5% and 10%, respectively. The remaining 26% is held by state-run Airports Authority of India (AAI).
On 25 February, GVK Airport Holdings Ltd, a subsidiary of GVK Power & Infrastructure Ltd, signed a definitive agreement with Bidvest Group, exercising its “right of first refusal" to acquire its 13.5%.
The GVK group did not specify the reason for doing so. However, the move followed reports that the Adani group was interested in picking up Bidvest and ACSA’s stakes in MIAL.
The Adani Group is among the latest entrants into India’s airport sector. In February, Adani Enterprises Ltd won the rights to run five of the six domestic airports that are being privatized, beating rival bidders by a steep margin and overnight turning into India’s largest private airport operator.
GVK has, with the acquisition of the ACSA stake announced on Friday, bought out the remaining consortium member.
Mint was the first to report on 27 August that Bidvest had appointed investment bankers to find a buyer for its stake in MIAL.
In a regulatory filing on 5 March, ACSA Global informed its shareholders that it has been approached with an offer to acquire its entire 10% shareholding in MIAL, held through its wholly-owned subsidiary, ACSA Global (Mauritius) Limited (ACSA Global). Subsequently, ACSA Global issued a right of first refusal notice to the existing shareholders of MIAL, it said in the filing without disclosing the name of the potential buyer.
GVK’s plans to divest its own stake in MIAL to raise funds could run into trouble in view of the latest developments.
Mint reported on 27 August that GVK was in talks with at least four potential buyers to sell a significant minority stake in MIAL and had appointed Citibank to manage the transaction. Four of the potential bidders—Singapore’s Changi Airport, German airport operator AviAlliance, India’s sovereign wealth fund National Investment and Infrastructure Fund, and the Abu Dhabi Investment Authority—were in advanced negotiations to buy a stake in the Mumbai airport, Mint had reported. With the stake sale, GVK was expected to raise between ₹4,000-6,000 crore, valuing MIAL at around ₹16,000 crore or more.
According to recent corporate filings, GVK Power & Infrastructure Ltd, which runs the airport business through GVK Airports Holdings Pvt. Ltd, had a debt of ₹12,854 crore at the end of March 2018. The proceeds from the stake sale were to be used for debt retirement and for equity infusion into the upcoming Navi Mumbai Airport for which it won the development rights in 2017.
Shares of GVK Power and Infrastructure Ltd closed at ₹7.25 apiece, up 2.98% from their previous close of ₹7.04 on BSE, while the benchmark Sensex snapped an eight-day winning streak to end 222.14 points, or 0.58%, down at 38,164.61 on Friday.