Two days before the deadline, the Adani Group on November 5 sought the Bombay High Court's nod to complete its offer to buy the 13.5 percent stake held by South African company Bidvest in Mumbai airport, saying the GVK Group has failed to deposit the money in the court-ordered escrow account on time.
It can be noted that, with the third extension, the GVK group has time till November 7 to pay Bidvest and complete the deal.
The Adanis' bid to enter the country's second busiest airport by buying out Bid Services Division Mauritius (Bidvest) from the MIAL was stalled after the airport operator MIAL controlled by the GVK Group chose to exercise its first right of refusal, and matched the Rs 1,248-crore or Rs 77 a share offer that Adanis made to the South African company in March, valuing MIAL at Rs 9,500 crore.
According to the agreement, the final payment and transfer of shares was September 30 which was later extended twice by consent to November 7.
On September 15, an arbitral tribunal, which heard the case between GVK and Bidvest, gave GVK time till October 31 to deposit the money to buy out Bidvest shares. According to the arbitral order if GVK failed to deposit the amount, Bidvest would be free to sell its stake to any third-party.
Adani Group counsel Darius Khambata on November 5 told a single bench of justice AK Menon that GVK has failed to comply with the tribunal order and has filed an affidavit saying arrangements for payments have been made.
"After the October 31 deadline, the Adanis wrote to Bidvest and GVK asking if the money had been deposited, but there was no reply," Khambata said.
He further said since GVK failed to comply with the tribunal order, Bidvest is free to sell its shares to a third-party. This was more so as the Adanis have already entered into an agreement with Bidvest to buy them out.
GVK group counsel Ravi Kadam told the court that it has complied with the tribunal order.
Bidvest counsel Janak Dwarkadas said while GVK has filed an affidavit before the tribunal saying the amount has been deposited, they are yet to get the details. "We wrote a letter to GVK on November 2, seeking details of the deposit made. However, we have not yet got a reply," Dwarkadas said.
He also said Bidvest is now not in a position to extend the November 7 date agreed with the Adanis to make final payment and complete the deal.
Khambata then informed the court that the group was willing to deposit the entire amount of Rs 1,248 crore to show its bonafides.
"We are willing to deposit the amount provided Bidvest agrees to extend the November 7 deadline to February 7, 2020," Khambata said.
Justice Menon said the court cannot get into it and that it is up to Bidvest to extend the date or not and posted the matter to Wednesday for further hearing.
In March 2019, Bidvest had entered into an agreement with Adanis to sell its entire stake in the airport for a consideration of Rs 1,248 crore.
Adanis in their suit filed on September 4 claimed that its share purchase agreement dated March 5 with Bidvest was valid, subsisting and binding. They also want the court to direct Bidvest and other shareholders in MIAL to do everything necessary to give effect to the agreement and pending final hearing of the suit direct the company to not create any third-party rights in respect of the process.
According to the petition, GVK exercised its right of first refusal before the 30-day time-frame on April 4.
In April, Bidvest had given a notice to GVK and ACSA Global (Airports Company of South Africa) which owns 10 percent in MIAL, along with a copy to the joint venture partner state-run Airports Authority that owns 26 percent, stating it was prepared to transfer the shares. GVK Airport Holdings owns 50.5 percent in the MIAL.
GVK purportedly exercised its right under clause 3.7 of the shareholders agreement (rights of first refusal) to purchase the shares. But the group failed to purchase the same within the time prescribed in the agreement, the plea said.
Instead, GVK moved the Delhi High Court seeking an injunction against Bidvest from offering or selling its shares to any person other than GVK, the Adanis said in their suit.
Though the Delhi HC on July 2 dismissed the petition noting that GVK did not show its willingness to complete the deal, a division bench later sent the dispute for arbitration.
GVK controls and/or significant influence over the management of MIAL and unless directed by this court will not act or do all such deeds as may be necessary to give effect to the share transfer by Bidvest to the plaintiff, the suit said.
In the meanwhile, ahead of the November 7 deadline, the debt-laden GVK Group had on October 28 entered into an agreement to sell as much as 79 per cent in GVK Airport Holdings for Rs 7,614 crore to three investors--Abu Dhabi Investment Authority, PSP Investments of Canada, and the state-owned National Investment and Infrastructure Fund. The move is aimed at preventing the Adanis, who have taken over five AAI-run airports earlier this year.
The GVK Group, through MIAL also owns the upcoming Navi Mumbai international airport too, and for Adanis a stake in MIAL will give an equal stake in the new airport as well. Adanis are also ready to buy out ACSA's 10 per cent but is stuck on valuation.
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