Adani Group In Talks To Buy Out GVK, Minority Partners In Mumbai Airport

Adani Group is in talks to buy out the stakes of GVK Group and a few of its partners in Mumbai International Airport Ltd., to become India’s biggest private airport operator, sources said on Monday.

While GVK Group is a majority shareholder with 50.5% stake, minority partners Airports Company South Africa and Bidvest Group hold 10% and 13.5%, respectively, of MIAL. The balance 26% stake is held by the Airports Authority of India.

Multiple teams are working on the Adani-GVK deal, one of the sources said. Talks are in the early stages and may lead to the Hyderabad-based group exiting the venture. A preliminary announcement is likely within weeks, the sources said.

Spokespersons of both Adani and GVK refused to comment on a potential deal.

Adani Group had in March 2019 agreed to acquire 13.5% stake of Bidvest Group for Rs 1,248 crore. GVK Group blocked the deal, claiming right of first refusal, but couldn't bring money to the table to buy out Bid Services Division Mauritius' stake. The matter then went to court.

Now, with its finances under strain, GVK Group has come around to the idea of selling the stake to Adani Group, sources said.

After seaports, Adani Group is betting big on airports and has won the bids to run six non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangaluru. It now wants to enter the country's second busiest airport by buying out Bidvest Group’s stake in MIAL.

In October 2019, debt-laden GVK Group entered into an agreement to sell 79% of its stake in GVK Airport Holdings for Rs 7,614 crore to an investor consortium of Abu Dhabi Investment Authority, Canada's Public Sector Pension Investments and state-owned National Investment and Infrastructure Fund. GVK planned to used the proceeds from this transaction to retire debt of its holding companies.

It is however not known whether GVK got all the funds from the deal.

According to sources, the consortium of NIIF, ADIA, and PSP Investments has agreed to give a "carve-out" to GVK Group promoters, the Reddy family, so as to allow them to sell stake in MIAL.

Talks of a potential Adani-GVK deal for the Mumbai Airport comes days after the Central Bureau of Investigation charged GVK Group with siphoning off funds totaling Rs 705 crore and 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.

Adani Enterprises Ltd., in its annual report for 2019-20, unveiled its ambition to be the largest private airport operator in the country by developing world-class infrastructure, enhancing passenger experience, creating entertainment destinations (airport village, hotels, and malls).

To achieve the aim, it plans to increase domestic airline connectivity to new and under served destinations, and increase the number of flights to long-haul destinations in the West and in South-East Asia.

On Monday, Adani Enterprises shares rose 6.88% to Rs 249.25 apiece on the BSE while the benchmark Sensex ended the day 0.95% higher at 38,799.08 points.