The Adani group had made the offer to all MIAL
shareholders way back in January 2019 and was awaiting their response. Of the investors, only Bidvest and ACSA (Airport Company of South Africa) had responded positively to sell their 23.5 per cent stake in MIAL, but litigation initiated by GVK over right of first refusal delayed the deal between Bidvest and Adani, the banker said.
In October last year, GVK signed an agreement to sell 80 per cent stake in the airport holding company to Abu Dhabi Investment Authority, National Investment and Infrastructure Fund
and PSP of Canada for Rs 7,614 crore which gave effective control of MIAL
and its subsidiary, Navi Mumbai International Airport
to the new investors. Going by the same argument of GVK, Bidvest and ACSA then moved the court as ROFR was not offered to them – leading to a legal stalemate.
What made the tide turn in favour of the Adani group was the Covid-19 pandemic, which shut down airports the world over, including Mumbai. There was no cash flow and the firm started defaulting on salaries July onwards, said a GVK insider.
“The outsourced staff even staged a protest as they were not paid since the airport was shut down. With dwindling cash balance, GVK clearly needed an immediate partner and Adani was waiting," the source said.
But the talks between Adani and GVK enraged Abu Dhabi Investment Authority, National Investment and Infrastructure Fund
and PSP, who complained to the Indian government that GVK was going back on its promise. “The letter to the finance ministry by PSP, ADIA and NIIF
was not liked by GVK’s top management as it was accusing them of back-tracking. However, the fact that these investors withdrew money from the escrow account (which was to be paid to GVK after getting all permission) was not mentioned,” said the source.
GVK then informed the three investors that their transaction stood terminated, as it was no longer effective and implementable. The reason cited by GVK for the termination was the terms envisaged in the transaction were not implementable and the alternative proposals discussed would not provide a resolution to the lenders of airport holding company by August-end, which was a requirement of GVK’s lenders.
END OF A BATTLE
Adani offers to buy out all MIAL
March 2019: Bidvest ACSA agrees to sell MIAL stake to Adani
April 2019: GVK moves Delhi HC against Adani-Bidvest deal citing ROFR
June 2019: Delhi HC rejects GVK plea; GVK division bench which sends matter to arbitration
GVK sells 80% stake in airport holding co to ADIA, NIIF
July 2019: Bidvest sues NIIF, ADIA, PSP and GVK; says it was not offered ROFR