The Adani Group and GVK Group have been engaged in a legal battle since March to buy out Bidvest’s stake in one of the world’s busiest airports.
In a setback for the Adani Group, the Bombay High Court (HC) on Wednesday rejected a plea by Adani Properties seeking interim relief to restrain Bidvest from selling its stake in Mumbai International Airport (MIAL) to third parties, including the GVK group. The move comes a day before the Adani Group’s share purchase agreement (SPA) for Bidvest’s 13.5% stake in MIAL lapses.
The Adani Group and GVK Group have been engaged in a legal battle since March to buy out Bidvest’s stake in one of the world’s busiest airports. Adani Properties, which in March entered an agreement with Bid Services Division (Mauritius) to buy out Bidvest’s stake in MIAL, had on September 4 moved the Bombay HC seeking to enforce the stake sale contract, which lapses on November 7. The plea also sought directions from the court to declare the SPA as “valid, subsisting and binding”. Additionally, it sought to restrict Bidvest from selling shares to any third parties.
On Tuesday, Darius Khambatta, Adani Group’s counsel, had told the court that the group was willing to immediately deposit the agreed upon price of around Rs 1,248 crore for Bidvest’s stake in MIAL, if Bidvest agreed to extend the long-stop date for the SPA to February 7, 2020.
A long-stop date is the deadline by which two parties must execute an agreement, failing which the agreement lapses. The Adani Group required the extension as Bidvest and Adani were yet to receive all necessary regulatory approvals to execute the SPA. “Bidvest has not agreed to extend the long-stop date, and the share purchase agreement with Adani lapses on Thursday,” the company’s counsel Janak Dwarkadas told FE.
Meanwhile, an arbitration tribunal had given the GVK Group time till October 30 to match the Adani offer to buy out Bidvest. As per the shareholders’ agreement of MIAL, GVK Airport Holdings, which holds a 50.5% stake in the Mumbai airport, had a right-of-first-refusal (RoFR) on sale of shares. GVK’s counsel had on Tuesday told the Bombay HC’s justice AK Menon that it had on October 29 deposited the amount in an escrow account. The arbitration tribunal will adjudicate the matter on November 24.
GVK last week entered into definitive agreements with subsidiaries of National Infrastructure Investment Fund (NIIF), Abu Dhabi Investment Authority (ADIA) and Public Sector Pension Investment Board (PSPIB) to invest Rs 7,614 crore into GVK Airport Holdings. The funds were raised to “retire debt obligations of (GVK’s) holding companies significantly, and fund the purchase of additional shares in MIAL by GVK Airport Holdings”, the company had said. On Tuesday, the Adani had also moved court seeking to restrain this investment transaction, arguing that it was in breach of transfer restrictions placed in the MIAL shareholders agreement.
The next logical move for the Adani Group would be to appeal Wednesday’s order in a division bench of the Bombay HC, one source involved in the proceedings said. Apart from Bidvest and GVK , Airports Authority of India (AAI) holds 26% stake in MIAL and Airport Company of South Africa (ASCA) holds a10% stake.