Gautam Adani lands on Mumbai International Airport, to acquire GVK Group stake and debt

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Updated: Aug 31, 2020 11:31 AM

After weeks of speculation, billionaire Gautam Adani on Monday announced that Adani Airports Holding Ltd will acquire GVK Group’s shareholding and control of Mumbai Airport.

As a part of the deal, Adani Enterprises will take over GVK’s debt, releasing GVK of various obligations, securities and corporate guarantees.

After weeks of speculation, billionaire Gautam Adani on Monday announced that Adani Airports Holding Ltd will acquire GVK Group’s shareholding and control of Mumbai Airport. GVK Airport Development Ltd is the holding company through which GVK Group holds 50.50% equity stake in Mumbai International Airport Ltd (MIAL), which in turn holds 74% equity stake in Navi Mumbai International Airport Ltd. According to the agreement, Adani Airports will acquire the debt of GVK ADL from its airport lenders. Share price of Adani Enterprises was trading flat while GVK Power and Infrastructure was up 5%.

“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. GVK and Adani Enterprises did not give out the financial details of the deal. Adani Enterprises said that Adani Airports intends to infuse funds into MIAL and also achieves financial closure of Navi Mumbai International Airport to be able to commence construction. This conversion would see Adani Group getting the 50.5% stake of GVK Group, and along with that it will also acquire 23.5% of minority partners, Airports Company South Africa, and Bidvest Group.  

As a part of the deal, Adani Enterprises will take over GVK’s debt, releasing GVK of various obligations, securities and corporate guarantees. The deal also gives Adani the ability to convert the acquired debt to equity of GVK Airports on mutually agreed terms, subject to obtaining necessary regulatory approvals. GVK Reddy, Founder & Chairman, said that the coronavirus pandemic has taken a toll on the aviation industry, setting it back by many years, and has impacted the financials of Mumbai International Airport Ltd. “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,” he added.

GVK, a leading conglomerate with interests in energy, airports, transportation, hospitality and life sciences businesses had earlier last year reached an agreement with Abu Dhabi Investment Authority, National Investment and Infrastructure Fund and PSP, collectively for MIAL. GVK Group has informed these investors that the Transaction Documents stand terminated, as it is no longer effective and implementable. GVK Group said that the terms of agreement reached last year with the investors was not “implementable”.

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