By James Mathew
Agreement between ADIA consortium and GVK Group's airport holding company has 'deal exclusivity' until January 31, 2021
Abu Dhabi Investment Authority (ADIA) has reportedly sought the Indian government’s help in resolving a tussle over its takeover bid for Mumbai International Airport Ltd (MIAL) amid a rival bid from the Adani Group to acquire the aviation hub.
ADIA, in consortium with India’s NIIF (National Infrastructure and Investment Fund) and Canada’s PSP (Public Sector Pension) Investments, have an existing agreement with the GVK Group, the promoter of MIAL, to acquire 79 percent stake in GVK Airport Holdings for $964 million.
The agreement entered into April 2019 has ‘deal exclusivity’ until January 31, 2021.
ADIA, which told Arabian Business it had no comment to make on a report in India's Economic Times, has reportedly written to India’s Prime Minister’s Office and finance ministry for a fair resolution to the takeover tussle.
The Abu Dhabi sovereign wealth fund has also sought urgent meetings with Indian government officials to discuss the way forward on the issue, the paper reported, quoting unnamed sources.
GVK Group currently holds 50.5 percent stake in MIAL, while two South African companies - Bidvest and Airports Company South Africa (ASCA) - together hold 23.5 percent stake in the venture. Airport Authority of India (AAI) holds the remaining 26 percent stake.
The Ahmedabad-based Adani Group has been eyeing MIAL since last year and has tried to buyout the stakes of the two South African companies initially as part of its move to get a foothold in the airport venture.
GVK Group, however, stalled the Adani move on the ground of 'the first right of refusal' and the matter is currently before the court.
The debt-ridden Hyderabad based GVK group is said to have started negotiating with the Adani Group recently, after securing permission from the ADIA consortium for entering into talks with third parties for the proposed stake sale.
Without this ‘carve-out’, negotiations with a new suitor are a breach of contractual terms, according to legal experts.
The Abu Dhabi fund is a major investor in India, especially in the infrastructure sector, having invested over $10 billion so far. Its most recent investment was in Reliance Jio where it deployed $750 million.