MIAL stake row: Adani seeks HC approval to close Bidvest agreement

Mumbai, November 5 () Two days before the deadline, the Adani Group on Tuesday requested the approval of the Bombay High Court to complete its offer to buy the 13.5 percent stake held by the South African company Bidvest at Mumbai airport, saying that the GVK Group has failed to deposit the money into the escrow account ordered by the court on time.

It should be noted that, with the third extension, the GVK group has time until November 7 to pay Bidvest and complete the agreement.

Adanis' offer to enter the second busiest airport in the country through the purchase of the Mauritius Bid Services Division of MIAL stagnated after the operator of the MIAL airport controlled by the GVK Group chose to exercise its first right of rejection, and coincided with Rs 1,248- crore or Rs 77 per share, an offer that Adanis made to the South African company in March, valuing MIAL at Rs 9,500 crore.

Under the agreement, the final payment and transfer of shares was on September 30, which was then extended twice by consent until November 7.

On September 15, an arbitral tribunal, which heard the case between GVK and Bidvest, gave GVK time until October 31 to deposit the money to buy Bidvest shares. According to the arbitration order, if GVK did not deposit the amount, Bidvest would be free to sell its stake to any third party.

Adani Group's lawyer, Darius Khambata, told a single court of law, AK Menon, on Tuesday that GVK failed to comply with the court order and filed an affidavit saying that payment arrangements have been made.

After the deadline of October 31, the Adanis wrote to Bidvest and GVK asking if the money had been deposited, but there was no response, Khambata said.

He also said that since GVK did not comply with the court order, Bidvest is free to sell its shares to a third party. This was more true since the Adanis have already signed an agreement with Bidvest to buy them.

GVK group lawyer Ravi Kadam told the court that he has complied with the court order.

Bidvest's lawyer, Janak Dwarkadas, said that although GVK has filed a sworn statement in court saying the amount has been deposited, they have not yet received the details. We wrote a letter to GVK on November 2, looking for details of the deposit made. However, we have not yet received an answer, Dwarkadas said.

He also said Bidvest is now unable to extend the date of November 7 agreed with Adanis to make the final payment and complete the agreement.

Khambata then informed the court that the group was willing to deposit the total amount of Rs 1,248 crore to demonstrate their good faith.

We are willing to deposit the amount whenever Bidvest agrees to extend the deadline from November 7 to February 7, 2020, Khambata said.

Judge Menon said the court cannot enter and it is up to Bidvest to extend the date or not and he published the matter until Wednesday for a new hearing.

In March 2019, Bidvest had signed an agreement with Adanis to sell its full stake in the airport for Rs 1,248 crore.

Adanis in his lawsuit filed on September 4 stated that his agreement to purchase shares on March 5 with Bidvest was valid, subsistent and binding. They also want the court to order Bidvest and other MIAL shareholders to do everything necessary to give effect to the agreement and, pending the final hearing of the lawsuit, direct the company not to create any third party rights with respect to the process.

According to the petition, GVK exercised its right of first rejection before the 30-day deadline on April 4.

In April, Bidvest had delivered a notice to GVK and ACSA Global (South Africa Airports Company), which owns 10 percent in MIAL, along with a copy to the Airports Authority of the joint venture, partner of the joint venture, which owns 26 percent, indicating that it was prepared to transfer the shares. GVK Airport Holdings owns 50.5 percent in MIAL.

GVK allegedly exercised its right under clause 3.7 of the shareholders agreement (first rejection rights) to buy the shares. But the group did not buy the same within the time prescribed in the agreement, according to the statement.

Instead, GVK moved to the Delhi High Court in search of a court order against Bidvest to offer or sell its shares to anyone other than GVK, the Adanis said in their lawsuit.

Although the Delhi HC on July 2 rejected the petition and noted that GVK did not show its willingness to complete the agreement, a division bank then sent the dispute to arbitration.

GVK controls and/or exerts a significant influence on the administration of MIAL and, unless directed by this court, will not act or take all necessary actions to give effect to the transfer of shares from Bidvest to the claimant, according to the demand.

Meanwhile, before the deadline of November 7, the GVK Group charged with debt had signed on October 28 an agreement to sell up to 79 percent in GVK Airport Holdings for Rs 7,614 crore to three investors - Authority of Abu Dhabi Investment, PSP Investments of Canada and the National Investment and Infrastructure Fund of state property. The measure aims to prevent the Adanis, who have seized five airports managed by AAI earlier this year. The GVK Group, through MIAL, also owns the next Navi Mumbai international airport, and for Adanis, a stake in MIAL will also grant an equal share in the new airport. Adanis is also ready to buy 10 percent of ACSA, but is stuck in the valuation. SP BEN MR MR