GMR-led Hyderabad airport operator seeks restraining orders against JV partner Menzies

Hyderabad International Airport. Photo: Wikipedia
GMR Hyderabad International Airport Limited (GHIAL) has sought restraining orders against global ground services and cargo handling company Menzies, which is a joint venture partner of GMR for the cargo handling operations at Rajiv Gandhi International Airport.

In an arbitration application filed before the Hyderabad High Court, the airport operator has requested the judges to restrain Menzies Aviation Cargo (Hyderabad) Limited, Menzies' officials and affiliates from interfering with its business of the Cargo Terminal at the Hyderabad airport.

The airport company also urged the court to restrain Hyderabad Menzies Air Cargo Private Limited (HMACPL), which is a 51:49 joint venture between GMR group and Menzies, from paying benefits such as dividend arising out of the shareholder rights to Menzies till the disposal of the arbitration proceedings and the arbitration award. Further it has sought orders to restrain Menzies from even transferring or encumbering in any manner the shares held by Menzies Aviation Cargo (Hyderabad) Limited in HMACPL, which runs the cargo terminal.

While the reasons for the rift between the GMR-led airport company and Menzies could not be independently verified immediately, an official at Menzies Aviation India management office in Bengaluru refused to comment on the Indian partner's action.

"GHIAL would like to reserve any comment on this, however would like to clarify that any discussions between the shareholders have no impact on the cargo operations and business as usual," a GHIAL spokesperson said.

Termed as the gateway for the whole of South Central India's supply chain, the cargo terminal boasts of the largest modular integrated cargo facility with dedicated sections such as Pharma Zone that offers temperature-controlled environment for temperatures sensitive products. Last year the cargo volumes at RGIA touched 100,000 tonnes while the passenger traffic had crossed 10 million for the first time after the green-field airport started operations in March, 2008.

"HMACPL has a world-class cargo terminal for the processing of bulk cargo, express cargo and mail. Our terminal is the first of its kind in India and has revolutionised cargo handling quality and performance... HMACPL has implemented proven cargo handling policies, procedures and processes based on Menzies International best practice, validated by many prestigious airlines globally.., " the company website says.

Headquartered in London, Menzies Aviation operates at 125 airports in 28 countries. In India it has operations at Hyderabad and Bengaluru airports. Along with Bobba Group it has also signed a non-exclusive ground handling license agreement with GHIAL way back in 2007. Menzies was claimed to be one of the world's major independent suppliers of ground and cargo handling services to the aviation market providing passenger, ramp and cargo services for as many as 500 airlines.

The HMACPL had registered a turnover of Rs 73.76 crore in financial year ending March, 2015. It has total assets worth of Rs 77 crore. The JV company had made a net profit of Rs 20.44 crore in year 2014-15, according to GMR's annual report.

GMR Hyderabad International Airport Limited (GHIAL) is a joint venture company promoted by GMR Group(63 percent) in partnership with Government of India(13 percent), Government of Telangana(13 percent) and Malaysia Airports Holdings Berhad (11 percent). It was incorporated to design, finance, build, operate and maintain the green-field airport at Hyderabad.

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