GVK Power & Infrastructure Limited on Monday formally announced that it, along with its subsidiaries, GVK Airport Developers Limited (“GVKADL”) and GVK Airport Holdings Limited (“GVKAHL”) (collectively “GVK”), have agreed to cooperate with Adani Airport Holdings Limited (“AAHL”), the flagship holding company of Adani Group for its airports business (and a subsidiary of Adani Enterprises Limited (“AEL”) (collectively “Adani”).
Under the agreement, Adani would infuse funds into Mumbai International Airport Limited to provide liquidity support. GVK in a statement said Adani would achieve financial closure of the Navi Mumbai International Airport project at the earliest in order to commence construction.
GVK ADL is the holding company through which GVK Group holds 50.50% equity stake in Mumbai International Airport Limited (“MIAL”), which in turns holds 74% equity stake in Navi Mumbai International Airport Limited (“NMIAL”).
The Adani Group will also take steps to complete the acquisition of a 23.5% equity stake from South African entiy ACSA and Bidvest in MIAL for which it has obtained CCI approval.
"Upon the acquisition of the debt of GVK ADL, Adani Group will take steps to obtain necessary customary and regulatory approvals, as may be required, to acquire controlling interest in MIAL," Adani said in a regulatory statement. Adani would be acquiring debt of various GVK lenders including a Goldman Sachs led consortium and HDFC. It would also release GVK of various obligations, securities and Corporate Guarantees given in respect of debt to be acquired by Adani.
GVK Reddy, Founder & Chairman, GVK said, "The aviation industry has been severely impacted by COVID-19, setting it back by many years and has impacted the financials of Mumbai International Airport Limited. It was therefore important, that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL, as well as to help achieve Financial Closure of the Navi Mumbai International Airport project, which is a project of national importance.
It is under these circumstances that we agreed to cooperate with Adani so as to achieve these twin objectives. Further, when the transaction is consummated, which is subject to customary approvals, we would be reducing a significant portion of liabilities to our lenders, which is of utmost importance to the group.”
Separately, GVK has notified the Abu Dhabi Investment Authority, National Investment and Infrastructure Fund and PSP, collectively (“Investors”) that the Transaction Documents stand terminated, as it is no longer effective and implementable.
The reason for this decision was a) the terms of the transaction envisaged in the Transaction Documents were not implementable and b) the alternative proposals discussed would not provide a resolution to the lenders of ADL by the end of August, which was a requirement of GVK's lenders.