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Friday, 22 February, 2019, 14 : 00 PM [IST]

Adani Group makes formal offer to buy 23.5% in Mumbai Airport

As per an Economic Times report, the Adani Group has made a formal offer to buy out the 23.5% held by two South African firms in Mumbai Airport. The Adani Group has sought to buy the stakes of Airports Company South Africa (ACSA) and Bidvest, the joint venture partners of GVK in the Mumbai International Airport Ltd (MIAL), at a valuation of INR 9,500 crore, people aware of the situation said.

With an offer on the table, the South Africans — believed to be keen on exiting the venture — have invoked the right of first refusal (RoFR) clause. As per the agreement, the invocation can happen only once. GVK has time till February-end to comply or face a protracted corporate or legal battle.

Bidvest’s holdings have been valued at INR 1,248.75 crore, or INR 77 per share, according to documents seen by ET. At this rate, MIAL is valued at about INR 9,500 crore, lower than the promoter group’s expectation. Bidvest has written to GVK and ACSA, with a copy marked to AAI, asking the two partners to match the offer within a month, according to the letter dated January 26, 2019.

People close to GVK said that it has received stake sale proposal from both the partners in the consortium and the RoFR clause gives GVK group a chance to match the offer.

“The GVK group will match the offer and buy the 23.5% stake in the company. We will not let the stake in the company go to anyone else,” said one of them, who did not want to be identified.

Bidvest launched an official stake sale process last year by roping in investment bank Rothschild. At the same time, GVK also launched efforts to raise funds at GVK Power and Infrastructure’s airport holding company. Citi has been working with GVK to find a partner.

Holding company GVK Airport Developers has a near majority stake in the consortium that’s running Mumbai airport since 2006 and also building a second one in Navi Mumbai for about Rs 16,000 crore. The holding company is estimated to have Rs 5,000-5,500 crore debt.

MIAL, the underlying operating company, is a JV between GVK, Airports Authority of India (AAI), Bidvest and ACSA. GVK Airport Developers owns 50.5% of MIAL, Bidvest holds 13.5%, ACSA owns 10% and the rest is with AAI. (Source: Economic Times)
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