The Delhi High Court on Monday dismissed a petition moved by GVK Airport Holdings, a step-down subsidiary of GVK Power & Infrastructure, to stop Bid Services Division (Mauritius), an arm of Bidvest, from selling its stake in Mumbai International Airport Limited (MIAL) to a third party. The court also vacated its earlier interim stay by which it had asked Bidvest to not sell its stake.
A single-judge bench of Justice Sanjeev Narula said that the GVK Power and Infrastructure arm had “chosen not to place on record any material to show its financial means and capacity to complete the transaction,” and instead tried to circumvent the issue by “contending that this question cannot be examined in the present petition”.
“These arguments are nothing but disjointed attempts to avoid scrutiny of the court on this question. This exposes the petitioner (GVK Airport Holding) and the court can firmly say that petitioner is not ready to go forward with the transaction. There is undeniably no genuine exhibition of readiness which could show that the petitioner is serious in completing the transaction. There is not even an iota of evidence before the court to substantiate the plea of readiness,” the single judge bench said.
GVK had earlier moved the Delhi High Court seeking to stop Bidvest from selling its stake in MIAL to a third party, which is the Adani group, according to reports. In February, GVK had exercised its Right of First Refusal (ROFR) to buy out 13.5 per cent of the total paid-up share capital of MIAL. The company had exercised this option after Bidvest had issued a notice to the former, saying it had found a buyer for its stake. GVK had then sought time till September to make the payment. Bidvest, however, had said that it could not wait until September 30 as it the other bidder was ready with the money.
With the exercise of ROFR for the acquisition of shares, GVK Airport Holdings’ stake would rise to 74 per cent upon the completion of acquisition of their stakes from the present 50.5 per cent. As it was agreed to acquire the shares from Bidvest as well as ACSA Global at the rate of Rs 77 per share, GVK will require Rs 2,171.4 crore to pay for the acquisition of the 23.5 per cent stake.
MIAL is a joint venture of GVK and South African investors Bidvest and ACSA. GVK Airport Developers owns 50.5 per cent of MIAL, while the Airports Authority of India owns 26 per cent, Bidvest 13.5 per cent and ACSA owns 10 per cent, respectively.