AAI opts out of race to buy shares from Bidvest, ACSA
Arbitration panel gives time till Oct 30 to GVK to bring in investors.
The arbitration court has also given GVK, which operates Mumbai airport, time till October 30 to deposit the purchase price of the shares (Rs 1,248 crore) in an interest bearing escrow account failing which Bidvest has the freedom to sell shares to any third party they wish to after securing necessary regulatory approvals.
As per the original shareholder agreement between MIAL’s partners, AAI has right of first refusal over the Bidvest and ASCA stakes. “The matter was deliberated at the appropriate levels and finally AAI has decided not to purchase the shares which are subject matter of the present proceedings, pending before this Arbitral Tribunal either from Bid Services Division (Mauritius) or of M/S ACSA Global Limited,” said the interim order of the arbitration panel that ET has reviewed.
In April, GVK informed the stock exchanges that it had entered into a non-binding agreement with NIIF-ADIA for its airports business at a valuation of around Rs 12,500 crore.
A deal was to reduce debt of up to Rs 5,750 crore. Canadian pension fund PSP Investments later joined the NIIFADIA consortium. The transaction to ringfence GVK’s crown jewel is yet to be completed. Sources said that the prospective investors have been insisting on a co-control deal with GVK, irrespective of the economic interest, and the right to appoint MIAL’s CFO.
AAI’s decision removes a potential hurdle for Adani Group that had made a play for India’s second busiest airport since January pitting them directly against GVK, the incumbent operator. The Hyderabad based infrastructure company needs to find a partner within the next one and a half months to stall the ongoing takeover attempt.
It will be interesting to see what ACSA’s next step would be. Unlike Bidvest they are not party to the ongoing arbitration and had given time to GVK till Sept 30 to buy them out through bilateral negotiations.
An Adani group spokesperson declined to comment as the matter is sub judice. Mails sent to GVK, Bidvest, and ASCA to determine their future course of action did not generate a response till press time. An AAI spokesperson said: “No comments since the matter is pending adjudication before the Learned Tribunal."
MIAL runs the Chhatrapati Shivaji International Airport in Mumbai. GVK owns a 50.5% stake in MIAL, while Bidvest and ACSA Global Ltd hold 13.5% and 10%, respectively. The remaining 26% is held by state-run AAI. The GVK-led consortium has operated Mumbai airport since 2006, investing over.`12,000 crore to build a state of the art airport. It is currently building a new one in Navi Mumbai for about Rs 16,000 crore.
MIAL owns 74% of the planned Navi Mumbai International Airport Ltd., while the rest is held by local nodal body City and Industrial Development Corp. GVK derives 90% of group revenue from MIAL.