Adani Group is on its way to become India’s largest private airport operator as it is set to acquire 74 per cent stake in the Mumbai International Airport (MIAL) for Rs 15,000 crore, reports stated on Monday.
Under the deal, Adani Group will acquire 50.5 per cent of GVK Group and additional 23.5 per cent from the minority partners (Bidvest-13.5 per cent and Airports Company of South Africa-10 per cent), reports added. The Airports Authority of India (AAI) holds the remaining 26 per cent stake in MIAL.
Sources were quoted as saying that the preliminary discussions have taken place between Adani and GVK which may lead to the latter exiting the prestigious Mumbai airport venture. Multiple teams are working on the Adani-GVK transaction, reports suggest that a preliminary announcement could come within weeks.
The spokesperson of both Adani and GVK did not issue any statement at the time of reporting.
The acquisition will also give Adani Group the ownership of Navi Mumbai’s upcoming airport, in which MIAL holds 74 per cent.
Adani Group had in March 2019 agreed to acquire 13.5 per cent stake of South African company, Bidvest for Rs 1,248 crore. However, GVK Group blocked the deal claiming the right of first refusal. But GVK couldn’t bring money to the table to buy Bid Services Division Mauritius’ (Bidvest) stake and the matter went to court.
This latest deal might put an end to the ongoing legal dispute between GVK group and its minority partners-Bidvest and Airports Company of South Africa (ACSA). The two sides are locked in a legal battle since the past year, with the minority stake holders seeking a way out from the airport business by selling their respective shares to Adanis.
With GVK Group’s finances under strain, it has now come around to the idea of selling the stake to Adani Group, a PTI report quoted a source as saying.
After seaports, Adani Group is betting big on the airport’s sector and has won the bids to run six Airport Authority-built non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore.
The development comes after the Central Bureau of Investigation (CBI) last week charged the GVK Group with siphoning off funds totaling Rs 705 crore. It is charged with causing a loss of Rs 310 crore to the exchequer by entering into fake work contracts on the land given by the government to MIAL.
With the six non-metro airports and MIAL, Adani Group will become the largest operator of airports other than state-run AAI, which runs most of the airports.
Adani Enterprises in its annual report unveiled its ambition to be the largest private airport developer in the country by developing world-class infrastructure at airports, both at airside and landside, enhancing the passenger experience, creating entertainment destinations (airport village, hotels, and malls).
To achieve the aim, it also plans to increase domestic airline connectivity to new and under-served destinations, and also raise the number of flights to long-haul destinations in the West and also to South-East Asia.