GVK buys 3 more days to fend off Adani from Mumbai airport

GVK had earlier last week moved the high court seeking to stop its South African partner Bidvest from selling its stake in Mumbai International Airport Ltd.

GVK Airport Holdings, a stepdown subsidiary of GVK Power & Infrastructure, has bought time till Thursday to fend off Adani group’s entry to Mumbai airport. 

The company and Bid Services Division (Mauritius), a subsidiary of Bidvest, have agreed to come up with an agreement on the pending stake sale, the lawyers for the two companiestold the Delhi High Court. The court has adjourned the case till Thursday and agreed to hear them on that day.

GVK had last week moved the HC seeking to stop its South African partner Bidvest from selling its stake in Mumbai International Airport (MIAL). 

The company had in February exercised its Right of First Refusal (ROFR) to buy out 13.5% of the total paid-up share capital of MIAL. GVK had exercised this option after Bidvest had issued a notice to the former, saying it had found a buyer for its stake.

Bidvest has now contended that it could not wait till September 30, which GVK wants as the last date till which it can pay the former. GVK, on the other hand, wants time till September-end, citing legal and other regulatory hurdles that could arise during the time it arranges for money to buy Bidvest’s stake.

With the exercise of ROFR for the acquisition of shares, GVK Airport Holdings’ stake would rise to 74 per cent upon the completion of acquisition of their stakes from the present 50.5 per cent level. As it was agreed to acquire the shares from Bidvest as well as ACSA Global at the rate of Rs 77 per share, GVK will require Rs 2,171.4 crore to pay for the acquisition of the 23.5 per cent stake.

It was not clear as to how the GVK was planning to raise the amount to fund this acquisition. MIAL is a joint venture of GVK and South African investors Bidvest and ACSA. GVK Airport Developers own 50.5 per cent of MIAL, while the Airport Authority of India owns 26 per cent, Bidvest 13.5 per cent and ACSA owns 10 per cent, respectively.