Hyderabad-based GVK Group seems to have got a breather in its fight to retain its stake in the Mumbai International Airport Limited (MIAL). The arbitration tribunal in its order dated Sunday, January 19th, has restrained South Africa's Bidvest Group or Bid Services from transferring its stake in the MIAL to a third party.
"It is directed that pending the hearing and final disposal of the arbitration proceedings, Bid Services is restrained from alienating by way of transfer to anyone its 16.2 crore equity shares in MIAL," the tribunal said in its order
The tribunal order also said that "the induction of a third party in the affairs of MIAL would have its own consequences and it is difficult to foresee them."
This development is being seen as a momentary respite for the GVK Group and a setback for Adani Group. The Adani Group has been in the news for its private offer to South Africa's Bidvest Group, which holds a 13.5 per cent stake, and a board seat in MIAL. The Gautam Adani-led conglomerate has offered to buy Bidvest's stake at Rs 77 per share for around Rs 1,200 crore.
GVK Group has been fighting tooth and nail to ensure that Bidvest does not sell its stake to a third party. The stake in the airport business is crucial for GVK Group, whose airport business revenue of around Rs 3,700 crore, comes largely from this airport and accounts for a major share of the revenue of its listed entity, GVK Power & Infrastructure.
Analysts see one of the major attractions of the Mumbai airport is its The 60-year concession period and regulated tariff structure of MIAL are its major attractions, according to analysts. MIAL, which runs the airport, is on the path to profitability and is seeing good growth in both non-aero and cargo businesses. It reported a profit of Rs 35.4 crore in 2017-18 compared to a loss of Rs 89.7 crore in the previous year. Gross sales rose from Rs 3,025 crore to Rs 3,342 crore during the period, according to Ace Equity data.
GVK Group has maintained that it is willing to pay Bidvest the same price it has been offered by Adani Group (Rs 77 per share) but needs time. In February, it informed stock exchanges that GVK Airport Holdings Ltd, a step-down subsidiary of GVK Power & Infrastructure, has the right of first refusal to acquire the 13.5 per cent paid-up capital from Bidvest at Rs 77 per share. This would raise the shareholding of the GVK Group from 50.5 per cent to 64 per cent.
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