Billionaire Gautam Adani's Adani Group on Monday said it has reached an agreement to acquire GVK Group's shareholding and control of Mumbai airport.
According to a regulatory filing, Adani Airport Holdings Ltd (AAHL), the flagship holding company of Adani Group for its airport business, "has entered into an agreement to acquire the debt of GVK Airport Developers Ltd (ADL)" in Mumbai International Airport Ltd (MIAL), which will be converted into equity stake.
So is Adani Group actually buying Mumbai Airport?
The Adani Group will take controlling stake in Mumbai airport through deals in which it will acquire the debt of current promoter GVK and buy out minority shareholders.
Adani Group will acquire GVK Airport Developers Ltd's 50.50 per cent stake as well as buyout 23.5 per cent stake of Airports Company of South Africa (ACSA) and Bidvest Group (for which it has obtained Competition Commission of India approval), it said in a regulatory filing.
A controlling 74 per cent stake in Mumbai International Airport Ltd (MIAL), together with the six non-metro airports it bagged in a government tender, will make Adani Group the largest private operator of airports in India. State-run Airports Authority of India (AAI) runs most of the airports in the country.
Adani Airport Holdings will acquire the debt of GVK Airport Developers, the holding company of GVK Power and Infrastructure, the filing said. The debt will be converted into equity at mutually-agreed terms, GVK said in a separate filing.
This conversion would lead to Adani Group getting all of 50.5 per cent stake of GVK Group. The two firms did not give details of the deal including the debt that Adani is taking over and the terms of conversion.
After seaports, Adani Group is betting big on the airport sector and has won the bids to run six AAI-built non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore. It has now entered the country's second busiest airport. The move comes at a time when the COVID-19 pandemic has hit brakes on the aviation sector.
"The aviation industry has been severely impacted by COVID-19, setting it back by many years and has impacted the financials of MIAL," GVK Chairman GVK Reddy said in a statement. "It was therefore important that we bring in a financially strong investor in the shortest possible time."
(Inputs from Agencies)