Mumbai: Airports Authority of India has decided not to exercise its right to bu y shares from its partners Bidvest and Airports Company South Africa (ACSA). The two South African companies have been trying to sell their combined shareholding in Mumbai International Airport Ltd (MIAL) and exit the 13-year old joint venture.
The arbitration court has also given GVK, which operates Mumbai airport, time till October 30 to deposit the purchase price of the shares (Rs 1,248 crore) in an interest bearing escrow account failing which Bidvest has the freedom to sell shares to any third party they wish to after securing necessary regulatory approvals.
As per the original shareholder agreement between MIAL’s partners, AAI has right of first refusal over the Bidvest and ASCA stakes. “The matter was deliberated at the appropriate levels and finally AAI has decided not to purchase the shares which are subject matter of the present proceedings, pending before this Arbitral Tribunal either from Bid Services Division (Mauritius) or of M/S ACSA Global Limited,” said the interim order of the arbitration panel that ET has reviewed.
In April, GVK informed the stock exchanges that it had entered into a non-binding agreement with NIIF-ADIA for its airports business at a valuation of around Rs 12,500 crore.
A deal was to reduce debt of up to Rs 5,750 crore. Canadian pension fund PSP Investments later joined the NIIFADIA consortium. The transaction to ringfence GVK’s crown jewel is yet to be completed. Sources said that the prospective investors have been insisting on a co-control deal with GVK, irrespective of the economic interest, and the right to appoint MIAL’s CFO.
AAI’s decision removes a potential hurdle for Adani Group that had made a play for India’s second busiest airport since January pitting them directly against GVK, the incumbent operator. The Hyderabad based infrastructure company needs to find a partner within the next one and a half months to stall the ongoing takeover attempt.
19/09/19 Mihir Mishra/Arjit Barman/Economic Times
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The arbitration court has also given GVK, which operates Mumbai airport, time till October 30 to deposit the purchase price of the shares (Rs 1,248 crore) in an interest bearing escrow account failing which Bidvest has the freedom to sell shares to any third party they wish to after securing necessary regulatory approvals.
As per the original shareholder agreement between MIAL’s partners, AAI has right of first refusal over the Bidvest and ASCA stakes. “The matter was deliberated at the appropriate levels and finally AAI has decided not to purchase the shares which are subject matter of the present proceedings, pending before this Arbitral Tribunal either from Bid Services Division (Mauritius) or of M/S ACSA Global Limited,” said the interim order of the arbitration panel that ET has reviewed.
In April, GVK informed the stock exchanges that it had entered into a non-binding agreement with NIIF-ADIA for its airports business at a valuation of around Rs 12,500 crore.
A deal was to reduce debt of up to Rs 5,750 crore. Canadian pension fund PSP Investments later joined the NIIFADIA consortium. The transaction to ringfence GVK’s crown jewel is yet to be completed. Sources said that the prospective investors have been insisting on a co-control deal with GVK, irrespective of the economic interest, and the right to appoint MIAL’s CFO.
AAI’s decision removes a potential hurdle for Adani Group that had made a play for India’s second busiest airport since January pitting them directly against GVK, the incumbent operator. The Hyderabad based infrastructure company needs to find a partner within the next one and a half months to stall the ongoing takeover attempt.
19/09/19 Mihir Mishra/Arjit Barman/Economic Times
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