Adani Group to acquire 74% stake in Mumbai, Navi Mumbai airports

Bidvest and Airports Company of South Africa (ACSA) own 13.5 per cent and 10 per cent of MIAL, respectively.

Adani will convert GVK’s debt into equity besides acquiring the 23.5 per cent combined stake of Bidvest and Airports Company of South Africa, thereby acquiring a controlling stake of 74 per cent in Mumbai International Airport (MIAL). 

This will allow “Adani Group to convert the acquired debt to equity of GVKADL on mutually agreed terms, subject to obtaining necessary regulatory approvals."

GVK ADL is the holding company through which GVK Group holds 50.50 per cent equity stake in Mumbai International Airport Limited, which in turn holds 74 per cent equity stake in Navi Mumbai International Airport Limited (NMIAL).”

“Adani Airport Holdings Limited (AAHL), the flagship holding  company of Adani Group for its airports business (and a subsidiary of Adani Enterprises Limited) has entered into an agreement to acquire the debt of GVK Airport Developers Limited  (GVKADL). GVK ADL is the holding company through which GVK Group holds 50.50 per cent equity stake in MIAL, which in turns holds 74 per cent equity stake in Navi Mumbai International Airport Limited  (NMIAL). According to the agreement, AAHL will acquire the debt of GVKADL from its airport lenders,” the Adani Enterprises Ltd stated in a BSE filing on Monday:

“The GVK Group and AAHL have agreed that AAHL will offer a stand-still to GVK, in addition, to release of the guarantee given by GVK Power and Infrastructure Limited with respect to the debt acquired by it. The Adani Group will also take steps to complete the acquisition of a 23.5 per cent equity stake from ACSA and Bidvest in MIAL for which it has obtained CCI approval. Upon the acquisition of the debt of GVK ADL, Adani Group will take steps to obtain necessary customary and regulatory approvals, as may be required, to acquire controlling interest in MIAL. AAHL intends to infuse funds into MIAL to ensure that MIAL receives much needed liquidity and also achieves financial closure of Navi Mumbai International Airport to be able to commence construction,” the Adani Group regulatory filing said.

“The aviation industry has been severely impacted by Covid-19, setting it back by many years and has impacted the financials of Mumbai International Airport Limited. It was therefore important that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL, as well as to help achieve financial closure of the Navi Mumbai International Airport project, which is a project of national importance. It is under these circumstances that we agreed to cooperate with Adani so as to achieve these twin objectives,” GVK Reddy, founder and chairman, GVK, stated in a release.

GVK Group and AAHL, a unit of Adani Enterprises, have agreed that AAHL will offer a stand-still to GVK.

“The GVK Group and AAHL have agreed that AAHL will offer a stand-still to GVK, in addition to release of the guarantee given by GVK Power and Infrastructure Limited with respect to the debt acquired by it,” Adani Enterprises said in a statement.

MIAL, which manages the Mumbai International Airport, will operate the upcoming Navi Mumbai International Airport as well.

A standstill agreement is a form of anti-takeover measure where a violation can effectively stall or stop the process of a hostile takeover if the parties cannot negotiate a friendly deal.

“AAHL intends to infuse funds into MIAL to ensure that MIAL receives much needed liquidity and also achieves financial closure of Navi Mumbai International Airport to be able to commence construction,” Adani Enterprises said.

The Adani Group has already received permission to operate the Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangaluru airports through the public-private partnership (PPP) model.

Separately, in a filing with exchanges today, GVK said it has terminated its agreement with Abu Dhabi Investment Authority (ADIA), National Investment and Infrastructure Fund (NIIF) and Canada's PSP Investments, signed last year, for its airports business. 

Reports, meanwhile, said a consortium led by ADIA, NIIF, PSP Investments had served legal notice on the GVK group against the stake sale by GVK, which they said would be a breach of their agreement.