GVK Power & Infrastructure ring-fences Mumbai airport with 10% stake buy

Mumbai: GVK Power & Infrastructure Ltd.on Friday said its airports arm will acquire the entire 10 per cent stake held by Airports Company South Africa (ACSA) Global in Mumbai International Airport Ltd (MIAL) for Rs 924 crore.

With this stake buyout, along with the recent purchase of 13.5 per cent from Bidvest, GVK Group's shareholding in MIAL will increase to 74 per cent from the existing 50.5 per cent.

"GVK Airport Holdings Ltd...has exercised it right, under Right of First Refusal in terms of the Shareholders Agreement dated April 4, 2006....to acquire 12 crore equity shares of MIAL, constituting 10 per cent of the total paid-up share capital of MIAL, from ACSA at the rate of Rs 77 per share," GVK Power said in a stock-exchange filing.

GVK will require Rs 2,171.4 crore to pay for the acquisition of the 23.5 percent stake from both the investors at Rs 77 per share. In February, GVK Airport exercised its right of first refusal to acquire South African firm Bidvest Group's 13.5 per cent stake in MIAL for Rs 1,247.40 crore ($175 million).

GVK Airport bought out stakes from foreign partners following reports that Gautam Adani-led conglomerate Adani Group was trying to pick up a 23.5 per cent stake in the operator of the Mumbai airport from Bidvest and Airports Company South Africa.

GVK runs MIAL, the country's second-largest and the world's busiest single-runway airport, and is also building the Navi Mumbai Inter-national Airport.

GVK is said to be looking to raise funds through a stake sale in its airport arm to prune debt and fund the Navi Mumbai airport project. According to reports, the group is looking to raise over Rs 2,000 crore through stake sale in its energy and transportation arms.

The airport unit contributed Rs 3,423 crore, or 88.6 per cent, of GVK's total income for 2017-18. The unit reported a profit after tax of Rs 35.41 crore in 2017-18, as per its annual report.

The stock closed at Rs 7.25, up 2.98 per cent on the BSE.