Adani Group has completed the purchase of a 23.5 per cent stake in Mumbai International Airport (MIAL) from two South African entities, marking the first step towards acquiring a majority control in the country’s second-busiest airport. In a stock exchange notification on Saturday, Adani Enterprises said that its airports division had acquired a 13.5 per cent stake of Bidvest and a 10 per cent stake of Airport Company of South Africa, for a consideration of Rs 1,685 crore. The deal marks a culmination of Adani Group’s two-year quest to acquire a stake and gain control of the Mumbai airport. It also marks the exit of foreign investors from the airport.
The group has already taken over six Airport Authority of India (AAI) airports under the privatization exercise. Last August, it had signed an agreement with GVK Group to acquire its 50.5 per cent stake in Mumbai airport. The deal also included the acquisition of a 23.5 per cent stake held by the two South African companies.
As a part of the deal, Adani Group will take over Rs 2,500 crore of debt owed by GVK Airport Developers, the holding company of MIAL. Adani will get a controlling stake in MIAL upon conversion of the debt into equity. Last month, the AAI had granted its nod to Adani Group for acquiring GVK Group’s 50.5 per cent stake in MIAL. A few other government approvals are pending.
In March 2019, Bidvest had signed an agreement to sell its stake to Adani Group for Rs 1,248 crore. GVK Group exercised the ‘right of first refusal’ but was unable to conclude the deal. The acquisition battle then moved to courts, as GVK Group tried to block Adani Group’s entry. In October 2019, GVK had announced the sale of a 79 per cent stake in its airport’s holding company to a clutch of foreign investors for Rs 7,614 crore, but the deal fell through. The group had hoped to use the proceeds to retire debt and buy out South African investors in MIAL.
Finally, under pressure from lenders, GVK agreed to sell its stake in MIAL to the Adani Group. A money-laundering probe by the CBI against GVK Group had made fundraising even more difficult.
“We see our airport portfolio as a critical level to help converge tier-I cities with tier-II and tier-III ones, in a hub and spoke model,” Adani Group Chairman Gautam Adani had said last year after signing of the agreement. “The addition of MIAL and Navi Mumbai to our existing portfolio of six airports provides us a transformational platform that will help shape and create strategic adjacencies for our other B2B businesses,” Adani said.
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