MIAL sale | Investors send legal notice, cite “breach of contract” by GVK: Report

MIAL (Representative Image)

Investor consortium of Mumbai International Airport (MIAL) has sent GVK Group and key lenders a legal notice opposing sale of the airport to Adani Group, adding that the move, if it goes through, would be a “breach of contract”.

Investors National Investment & Infrastructure Fund (NIIF), Abu Dhabi Investment Authority (ADIA), and Canada’s Public Sector Pension (PSP) Investments have sent to notice to GV Sanjaya Reddy and executives of State Bank of India, Goldman Sachs India, HDFC Bank, Punjab National Bank, ICICI Bank and Axis Bank, The Economic Times reported.

The notice sent on August 27 states that constant media speculation about Adani Group’s interest in MIAL was causing them concern, it added.

Moneycontrol could not immediately verify the report.

NIIF, ADIA and PSP Investments had in October 2019 agreed to buy 79 percent stake in GVK Airport Holdings for Rs 7,614 crore. The amount was to be used by GVK to service debt of holding companies and fund purchase of additional shares in MIAL.

Since then however the matter is subjudice with an arbitration tribunal. Legally, the agreement dated October 27, 2019, gives the trio exclusivity till January 27, 2021 and also prohibits GVK from bilateral deals or negotiations with competing parties.

The notice points out that the investors have allowed GVK “limited exception to explore alternative transactions” but added that “execution or binding agreement till January-end would be a breach of the binding document.”

HDFC, SBI, GVK Group, Axis Bank, PNB, Goldman Sachs, ICICI Bank and NIIF did not respond to queries, while ADIA and PSP Investments declined questions, the report said.

Investors added that they “have been committed” to the deal and “remain committed”, adding that they incurred “significant cost and effort” over two years. They also pointed out that they put $300 million in an escrow account for nine months as a sign of “intent to invest”.

The letter asked for “independent and transparent sale” process to find the best “owner and operator for MIAL”.