The Adani Group is all set to become the country’s biggest private airport operator. Its flagship holding company, Adani Airport Holdings Ltd, will acquire 74 per cent controlling stake in the Mumbai International Airport and the proposed Navi Mumbai International Airport. The group had entered the aviation sector last year by acquiring 50-year operational rights for six newly privatised airports in Ahmedabad, Lucknow, Mangaluru, Thiruvananthapuram, Guwahati and Jaipur.
In an agreement signed on Monday, AAHL has agreed to acquire the entire 50.5 per cent stake of GVK Airport Developers Ltd in Mumbai International Airport Ltd. It will also acquire 23.5 per cent stake of minority partners – Airports Company South Africa and Bidvest Group, which hold 10 per cent and 13.5 per cent, respectively. The state-run Airport Authority of India holds the remaining 26 per cent stake.
The Adani group had been eyeing a controlling stake in GVK’s airport business for some time. The agreement comes within weeks of the CBI and the Enforcement Directorate opening investigations against GVK promoters over the alleged irregularities to the tune of Rs.705 crore in operating the Mumbai airport.
As per a disclosure to the Bombay Stock Exchange on Monday morning, the Adani group said it will take steps to obtain the necessary customary and regulatory approvals, as may be required. The group will also infuse funds into MIAL for liquidity support and achieve financial closure of the Navi Mumbai project to commence construction.
For its part, the Hyderabad-based GVK group has agreed to “cooperate” with the Adani group. The terms of cooperation include GVK’s release from all obligations and corporate guarantees in respect to the debt it owes to lenders such as Goldman Sachs and HDFC, and the conversion of this debt into equity on mutually agreed terms with the Adani group.
Commenting on the development, GVK chairman, Dr GVK Reddy said, “The aviation industry has been severely impacted by Covid-19, setting it back by many years, and has impacted the financials of MIAL. It was therefore important that we bring in a financially strong investor in the shortest possible time.”
In a separate disclosure, GVK said it has notified its investors – the Abu Dhabi Investment Authority, the National Investment and Infrastructure Fund and Canada’s Public Sector Pension Investment – that the transaction documents stand terminated, as it is no longer effective and implementable.