In a major blow to the GVK group, the Delhi High Court on Monday allowed South Africa’s Bidvest to sell its stake in Mumbai International Airport (MIAL) to a third party, paving the way for the Adani group to make investment in the marquee airport.

According to sources, GVK is likely to challenge the verdict at the division Bench of the high court. Adani Enterprises (AEL) has been eying to pick up stake in MIAL to mark its foray into the airport business. AEL in February won the rights to develop and operate six government airports but is yet to receive the Union Cabinet’s nod.

Queries sent to the Adani group on whether it would buy a stake in MIAL did not elicit any response till the time of going to press. GVK Airport Holdings, a subsidiary of GVK Power and Infrastructure, had approached the high court in April seeking to restrain Bidvest, a unit of Bid Services Division, from selling its 13.5% equity stake to a third party. The company claimed to have the right of first refusal (RoFR) to purchase shares under the shareholders’ agreement signed in 2006.

It initiated a process to acquire Bid Services Division (Mauritius)’s 13.5% in MIAL during February and 10% stake of Airports Company South Africa (ACSA) on March 22 under RoFR in terms of the shareholders agreement. GVK’s offer to Bidvest was valued at Rs 1,248 crore while it was ready to shell out Rs 924 crore for ACSA’s holding.

Justice Sanjeev Narula dismissed debt-laden GVK’s effort to exercise RoFR as it failed to show any preparedness to purchase the share. “There is undeniably no genuine exhibition of readiness which could show that the petitioner is serious in completing the transaction. There is not even an iota of evidence before the court to substantiate the plea of readiness,” Justice Narula ruled.

GVK had a debt of around Rs 12,854 crore at the end of March 2018. According to the contract, state-owned Airport Authority of India (AAI) will now have the option of buying Bidvest’s share following which it can be put up for sale by the South African company to any party.

The AAI had backed Bidvest’s claim in the court, saying that GVK’s opportunity to exercise RoFR had expired. AAI is unlikely to increase its shareholding in MIAL beyond 26%. While GVK owns 50.5% in MIAL, Airports Company South Africa holds 10%.

Bidvest had claimed that GVK had to complete acquisition of its 162 million equity shares in MIAL within 30 days of the offer; in this case the offer was made on March 4, 2019. On the other hand, GVK argued that 30-day clause under the share purchase agreement begins after approval of transaction from competent authorities.

The company has already invoked the arbitration clause against Bidvest over this dispute. GVK’s airport business reported a flat growth in profits at Rs 597 crore for 2018-19 as compared to Rs 594 crore in FY18. The GVK-led consortium has run India’s second-busiest airport since 2006 and is building a second one in Navi Mumbai for about Rs 16,000 crore.

On April 19, GVK group subsidiaries GVK Airport Developers and GVK Airport Holdings signed a term sheet and exclusivity agreement with the Abu Dhabi Investment Authority and the National Investment & Infrastructure Fund for investment in new shares in GVK Airport Holdings equating to a 49% stake.

GVK had initiated a process to identify and select preferred investors to raise capital to reduce or refinance debt obligations of up to Rs ,750 crore, the statement had said.