SA firm seeks govt help to sell 10% stake in Mumbai International Airport

Mumbai International Airport Limited
After the Bidvest Group, Airport Company of South Africa (ACSA) has sought help from the ministry of external affairs (MEA) and the ministry of civil aviation to sell its 10 per cent stake in Mumbai International Airport (MIAL).

The South African company warned that its board is concerned about making future investments in India, considering the legal and regulatory delays.

In a communication to the MEA, group executive (business development) of ACSA Charles Shillows said it is an investor in MIAL since 2006.

After successful completion of the project, the company decided to exit the investment in January 2019 when the Adani Group approached it to sell stake.

ACSA decided to sell its stake to the Adani Group as it wants to re-deploy funds in other markets such as Africa, South America and in Asia, including in greenfield airports in India.

But the GVK Group, which owns majority stake in MIAL, decided to move court against the sale, citing its right of first refusal.

The matter is currently pending in courts and this is leading to delay.

“However, our sale process has been frustrated due to numerous litigations, and regulatory approvals, leading to inordinate delay in such sale,” Shillows said.

As a foreign long-term strategic investor in India, ACSA said it is keen to invest in upcoming opportunities such as Jewar airport, where it bid with a local partner.

“However, inordinate delays due to the legal process, and unfavourable regulatory approvals have led to concerns on future investments in India,” he said.

He added that these are critical issues, which have raised concerns at the board level on future investments in India – one of the world’s fastest growing aviation markets.

When contacted, a GVK spokesperson said, “We expect to close the transaction with Bidvest and ACSA when they stop litigation. They are trying to scuttle our right of first refusal, and instead must agree to conclude the transaction in line with the shareholder agreement.”

In March last year, Bidvest announced sale of its 13.5 per cent stake to Adani Group for Rs 1,250 crore. At the same time, it offered its stake to other shareholders of MIAL as per the right of first refusal agreement signed with shareholders.

GVK had agreed to buy back Bidvest’s stake but failed to arrange for funds within the 30-day period in April 2019. The group then moved Delhi High Court, seeking a stay on the stake sale to Adani Group, but the high court rejected GVK’s plea in July last year. A division bench then sent the matter to an arbitration panel.

The arbitration tribunal, in January this year, ruled against Bidvest on the airport stake sale. Both Bidvest and ACSA said GVK wants to buy the stake, but it is neither giving them the money nor depositing it in an escrow account.
On January 28, 2020, the Supreme Court said the Delhi High Court will decide on Bidvest’s request, seeking permission to sell 13.5 per cent in MIAL to Adani Enterprises expeditiously.

The GVK Group owns 50.5 per cent stake in MIAL while Airports Authority of India holds 28 per cent stake. Bidvest and ACSA Global of South Africa hold the rest.


ACSA had agreed to sell MIAL stake to Adani in Jan 2019

ACSA wants to re-deploy funds to Africa, South America and Asia

GVK moves court against Bidvest, ACSA sale citing ROFR

ACSA says its sale process delayed due to litigation, lack of regulatory approvals

ACSA board concerned over future investments in India

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