Adani Group Acquired 74% Stake in Mumbai International Airport
Adani Group recently announced that it will be acquiring GVK’s stake in Mumbai International Airport Ltd. The group will also be acquiring shares of minority partners Airports Company South Africa and Bidvest Group, therefore, giving it a 74% stake in Mumbai International Airport. The remaining 26% will be with the Airports Authority of India (AAI).
As a part of the business deal, Adani Airport Holdings Limited (AAHL), the company of Adani Group for its airports business and a subsidiary of Adani Enterprises Limited, will agree to accumulate the debt of GVK Airport Developers Limited, the company through which GVK Group holds 50.5% equity stake in MIAL.
The Adani Airport and GVK Group agreed that Adani Airport will offer a stand-still to GVK, and, to the discharge of the guarantee given by GVK Power and Infrastructure Limited with reference the debt acquired.
Recently, the GVK Group has been trying to pay back its debts. The group is facing heat from its vendors who have taken a series of measures to recover their debts from the group, including clearing a proposal made by Deutsche Bank to buy out Goindwal Sahib power loans worth whopping Rs. 3,900 crores at a reduction of 70%.
In May 2020, CRISIL downgraded Mumbai International Airport’s short-term loans, project loans, and Rs. 2,000 crores of proposed non-convertible debentures because of cashflow constraints. MIAL’s debt continues to be under a rating watch with negative implications, the rating agency mentioned.
With 6 airports already under the wings, Adani Group has now become the 2nd largest private airport operator after GMR Group which operates Hyderabad and Delhi International Airports.
The deal also provides the Adanis ownership of the upcoming Navi Mumbai Airport, during which, MIAL holds around 74% share.
GVK Group and Adanis have agreed that Adani will offer a stand-still to GVK, additionally, to release of the guarantee given by GVK Power and Infrastructure Limited concerning the debt acquired by it.
The company said in a statement, “Adani Airport Holdings Limited intends to infuse funds into MIAL to ensure that MIAL receives much-needed liquidity and also achieves financial closure for Navi Mumbai Airport.”