“There is undeniably no genuine exhibition of readiness, which could show that the petitioner (GVK) is serious in completing the transaction,” Delhi HC
Later, a division Bench of Delhi HC
asked both parties to go for arbitration. “The GVK motive is to stall our divestment while progressing a transaction of its own, which involves ceding control of MIAL, in order to remedy their group indebtedness,” Bidvest wrote to the civil aviation ministry.
Furthermore, MIAL management’s time is being consumed over unnecessary litigation
when it is of utmost priority for India that the company is focused on the development of the new international airport in Navi Mumbai and service levels of MIAL, Bidvest said, while asking for the government to intervene in the matter.
In September last year, the arbitration tribunal had stayed Bidvest from selling its shares to Adani Group, but on the condition that GVK Group deposit the entire purchase amount in a no-lien interest bearing escrow account by October 31, 2019. But this condition was not met by GVK.
Instead, GVK Group announced a sale of its 79 per cent stake in its airport holding company to Abu Dhabi Investment Authority, PSP Investments, and National Investment and Infrastructure Fund for Rs 7,614 crore. The proceeds from the transaction was to be used by GVK to retire around Rs 5,500-crore debt and fund the purchase of additional shares in MIAL from two South African entities — Bidvest and ACSA Global.
“It is apparent that GVK is trying to raise funds from these investors at a higher valuation and did not have funds to acquire our stake at the time of exercising its RoFR,” Bidvest said, adding “GVK Group has used the litigation
to gain time and defeat our inherent right to sell our shares”.
When contacted, a GVK spokesperson said GVK Group and Bidvest shared a good relationship for the past several years and Bidvest’s behaviour during the exit has been shocking for the GVK group.
“It is due to GVK’s efforts that Mumbai airport is considered as one of the best airports in the world. When Bidvest is making a very attractive return on its original investment in MIAL, GVK Group does not understand what Bidvest has against GVK buying its stake when the money has already been deposited in an escrow account," it said.
"Instead of supporting GVK to exercise its right to exercise the RoFR, Bidvest decided to collude with another Indian party and blatantly violated our shareholders agreement just to ensure GVK does not get to buy the stake. There is no logical explanation for this kind of behaviour except that it wants to create problems for MIAL when it is exiting. In addition to not following the shareholders’ agreement, it has committed serious breaches of the shareholders’ agreement and the share purchase agreement," GVK said, adding the matter is now sub judice.
"We would like to state on record that GVK has no intention to frustrate Bidvest’s exit. Instead, if it had cooperated with GVK, the transaction would have been successfully completed by now and GVK would have acquired the stake," the statement said.
Meanwhile, the arbitration panel has ruled in favour of GVK Group in the dispute between Bidvest and GVK Group, legal sources said. "We are happy that the honourable tribunal has ruled in our favour. Currently, we are in discussions with our lawyers for the future course of action and hence, it will be a bit premature to share any further details," said a GVK spokesperson.