Adani takes Bidvest to HC over Mumbai International Airport stake sale

The South African company has a 13.5% stake in Mumbai International Airport (MIAL)

The takeover battle for Mumbai airport has now landed in the Bombay High Court (HC), with the Adani group moving it against Bidvest, part owner of the airport, and other shareholders to take over its stake. The South African company has a 13.5 per cent stake in Mumbai International Airport (MIAL). The petition, filed on Wednesday, also names GVK, the Airports Authority of India (AAI), MIAL, and the civil aviation ministry as respondents.

In March this year, Bidvest had signed an agreement to sell its stake to the Adani group at the same consideration offered to other shareholders of MIAL — GVK, Airports Company of South Africa (ACSA) and the AAI. Bidvest had offered to sell its stake for Rs 1,248 crore or Rs 77 a share.

Though GVK exercised its right of first refusal (ROFR) to buy Bidvest shares, it failed to execute the transaction before the 30-day deadline, which expired on April 4. The GVK group then moved the Delhi HC against Bidvest, seeking to stop its share-sale to any third party. The single-judge Bench rejected GVK’s petition on July 2. A division Bench of the Delhi HC later sent the dispute to an arbitration panel.

During the proceedings, Bidvest contended it could not wait till September 30, which GVK wants as the last date. GVK, on the other hand, wants time till September-end, citing legal and other regulatory hurdles that could arise during the time it arranges for money to buy Bidvest’s stake.

As of now, GVK Airport Developers own 50.5 per cent of MIAL, while the AAI owns 26 per cent. Bidvest and ACSA own 13.5 per cent and 10 per cent, respectively. When contacted, a GVK spokesperson declined to comment. An Adani group official did not comment because the matter is sub-judice.

In its petition, the Adani group said GVK has failed to complete the transaction within the deadline and the present arbitration proceedings were merely to delay the transaction and frustrate its efforts to buy Bidvest’s stake.

The Adani group said there was no injunction preventing Bidvest from selling the shares to a third party, as the ROFR right of GVK has lapsed and ACSA and the AAI have also not exercised their ROFR.  Hence, the Adani group pleaded to the Bombay HC to direct all respondents to give effect to the transfer of shares by Bidvest to the Adani group.
 

On September 3, Bidvest said in Cape Town it was confident of selling its stake in the Mumbai airport by the end of the year. This was in spite of imminent arbitration with majority shareholder GVK, which is attempting to prevent the sale, Bidvest Chief Executive Lindsay Ralphs had said during the earnings call.

The Adani group, India’s biggest private sector port and power company, is fast emerging as a major player in the Indian airport sector, bagging the mandate to manage three top airports in India, including Ahmedabad, Mangaluru, and Lucknow.