Adani Group on Monday said it had decided to acquire debt of GVK Airport Developers (GVKADL), the firm through which GVK Group holds 50.5% stake in Mumbai International Airport Ltd. (MIAL). The move will pave the way for Adani to get a controlling, 74% stake in MIAL.Adani Group said the holding firm for its airports business — Adani Airport Holdings (AAHL) — would acquire the debt of GVKADL from its airport lenders. The financials of the deal, neither the debt nor the terms of conversion into equity, however, were not disclosed. Adani said in a statement that GVK Group and AAHL had agreed that AAHL would offer a standstill to GVK, in addition to release of the guarantee given by GVK Power & Infrastructure with regard to the debt acquired by it. The Adani Group will also take steps to complete the acquisition of a 23.5% equity stake from ACSA and Bidvest in MIAL, for which CCI approval had been obtained. On acquisition of GVKADL’s debt, Adani Group said it would take steps to obtain customary and regulatory approvals to acquire controlling interest in MIAL. AAHL intends to also infuse funds into MIAL to ensure that the latter received the “much needed liquidity” and achieved financial closure of Navi Mumbai International Airport to be able to commence construction. GVKADL holds 74% equity stake in the new airport project.Separately, GVK Group said it had signed an agreement to cooperate with Adani in relation to MIAL. The terms of cooperation include acquisition of debt by Adani from various GVK lenders, including a Goldman Sachs-led consortium and HDFC; relieve GVK of various obligations, securities and corporate guarantees given in respect of debt to be acquired by Adani, and enabling Adani to convert the acquired debt to equity of GVKADL on mutually agreed terms.GVK founder and chairman GVK Reddy said the aviation industry had been severely impacted by COVID-19, setting it back by many years and also impacting the financials of MIAL. “It is therefore important, that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL,” he said.
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