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GVK Power & Infrastructure Ltd is set to acquire 23.5 per cent stake of South African firms, Bidvest Services Division and ACSA, in Mumbai International Airport Ltd and expects to complete the transaction by October-end.
The diversified Hyderabad-based infrastructure company, which has struck an equity deal with a sovereign fund, has made the necessary arrangements to finance the deal. In acquiring the Bidvest and ACSA stake, GVK will exercise its right to acquire the stake and take its holding to 74 per cent.
Issac George, Chief Financial Officer of GVK, said “discussions on the acquisition are at an advanced stage and we expect to conclude the transaction by next month. GVK has the first right of refusal in stake acquisition.”
Earlier, the Adani group was seeking to acquire Bidvest’s stake and the matter was taken up with the court. However, the GVK management was keen to acquire additional stake and step up its holding in the company.
GVK owns 50.5 per cent stake in MIAL and has decided to acquire 23.5 per cent stake of South African investors, Bidvest Group and ACSA, which has about 10 per cent stake in the airport special purpose vehicle promoted by GVK.
However, things got complicated with a Gautam Adani Group entity, which recently forayed into the airport business, having bagged a mandate for development of some airports, seeking to buy out Bidvest’s stake, estimated to be worth Rs 1,235 crore.
Speaking on the sidelines of GVK’s 25th Annual General Meeting, GVK Reddy, Chairman, told BusinessLine , “We are keen to conclude the stake acquisition and consolidate our business. We expect to conclude the transaction by exercising our right to acquire the stake. Any other party can come into the picture only when we reject, as we have first right of refusal as part of the contract.”
There has been some delay in concluding the buyout of the Bidvest and ASCA stake due to some vexatious litigations, he explained.
NAVI MUMBAI
Having made necessary financial arrangements for the ambitious greenfield Navi Mumbai International Airport Ltd, the GVK management expects to expedite works on the project and take up its phased development.
In phase one, GVK will invest about Rs 8,500 crore to create a facility for 10 million passengers per annum. Later, this will be stepped up by an additional 20 million passengers, with an investment of about Rs 3,500 crore, GVK Reddy said.
“Last month we awarded the engineering, procurement and construction contract for the greenfield Navi Mumbai airport to the Transportation Infrastructure and Buildings and Factories business of L&T Construction,” Reddy said.
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