Adani Group move Bombay High Court against GVK bid to stall its deal in the Mumbai airport stake

Adani Group led by Gautam Adani has dragged the shareholders of the GVK Group-run Mumbai airport (MIAL) and the aviation ministry to the Bombay High Court, seeking a direction to them to allow buying out the minority stake held by South African firm Bidvest in the airport.

The South African firm Bid Services Division Mauritius or Bidvest owns 13.5 per cent in the Mumbai airport. The other shareholders are ACSA Global (Airports Company of South Africa) which owns 10 per cent, Airports Authority of India (AAI) holding 26 per cent and GVK Airport Holdings – the majority owner with a 50.5 per cent ownership.

Bidvest had entered into an agreement with Adanis to sell its entire stake in the airport for a consideration of Rs. 1,248 crore or Rs. 77 a share. The Adanis won the bid to run six other AAI-run airports last February, and had offered around Rs. 950 crore to ACSA, valuing the world's busiest single-runway airport that handles an around 1,000 flight movements a day, at Rs. 9,500 crore.

Adani Group filed the suit on September 4 and has claimed that its share purchase agreement dated March 5, 2019, with Bidvest, held through its Mauritian arm, is valid, subsisting and binding. The current suit was filed to seek specific performance of the agreement executed between the Adanis and Bidvest for purchasing its entire shareholding of 1,62,000,000 shares representing 13.5 percent of the fully paid-up share capital of MIAL.

It has also sought a direction to the South African company and the other shareholders in MIAL to do everything necessary to give effect to the agreement and pending final hearing of the suit direct the company to not create any third-party rights in respect of the process.

Bidvest had given a notice to GVK and ACSA Global along with a copy to the AAI stating it was prepared to transfer the sale shares. Allegedly since then GVK purportedly exercised its right under clause 3.7 of the shareholders agreement (rights of first refusal) to purchase the shares. According to the plea, GVK however failed to purchase the same within the time period prescribed in the agreement.

The petition was dismissed by the Delhi High Court on July 2 stating that the company had not shown its readiness to complete the deal. Later, a division bench sent the dispute for international arbitration. GVK sought time till September 30 to close the deal, which Bidvest refused.

The suit is likely to come up for hearing before a single bench of Bombay High Court next week.