The GVK Group has said that it has raised over Rs 7,600 crore from investors which will be used to pare its debt and buy a 23.5% stake in Mumbai International Airport (MIAL). The move has put a halt on Adani Group's efforts to buy a stake in the company that runs Mumbai airport.
"GVK Power & Infrastructure's subsidiaries, GVK Airport Developers (GVKADL) and GVK Airport Holdings (GVKAHL) have entered into definitive agreements with subsidiaries of the Abu Dhabi Investment Authority (ADIA), Public Sector Pension Investment Board (PSP Investments) supported by its global airports platform, AviAlliance, and with National Investment & Infrastructure Fund (NIIF)," the company said in a release as seen by the Economic Times. These companies will make an "aggregate investment of Rs 7,614 crore, into GVKAHL."
As the transaction gets concluded, GVKAHL will have four stakeholders- GVKADL, ADIA, PSP Investments and NIIF. The GVK Group will also hold 20.9% of GVKAHL. The deal evaluates GVK's airport assets, which comprise Mumbai airport and the upcoming Navi Mumbai airport, at Rs 9,608 crore.
GVKAHL the parent company of MIAL operates the Mumbai airport. The company has won the bid to develop Navi Mumbai International Airport (NMIA) through Navi Mumbai International Airport (Private) (NMIAL) which is the subsidiary of MIAL.
"Proceeds from the transaction will be used by GVK to primarily retire debt obligations of its holding companies significantly and fund the purchase of additional shares in MIAL by GVKAHL from Bidvest and ACSA in accordance with the right of the first offer already exercised by GVKAHL," the release stated.
"The amount for payment to Bidvest will be deposited in an escrow account before the end of October as advised by the arbitration tribunal," a spokesperson for the company told the news daily.
Bidvest and ACSA together own around 23.5% stake in MIAL. They were looking to sell their stake in the company and had offers from the Adani Group. GVK Group holds 50.5% stake in MIAL and the rest is owned by the Airports Authority of India (AAI). GVK with its purchase of Bidvest's 13.5% and ACSA's 10% stake will take its total shareholding in MIAL to 74%.