The Supreme Court on Tuesday directed the arbitral tribunal to decide by December 15 if GVK Airport Holdings is in a position to purchase 13.5% stake of Bid Services Division (Mauritius) Ltd (subsidiary of Bidvest Group), in Mumbai International Airport (MIAL).
A Bench led by Justice R Bhanumati directed the three-member arbitral tribunal to decide on Sunday if GVK had complied with its earlier order to deposit the money after Bid Services argued that that it wants to sell its stake and the Adani group is keen to buy it.
“If they (GVK) have the money to buy, let them get the money to the court on Monday,” senior counsel Mukul Rohatgi argued, adding that GVK’s entire strategy is to delay the whole process.
“If the deal is not struck with Adani soon enough, then Adani may not be there in January,” Rohatgi added.
He insisted on the urgency saying that Bid Services “runs the risk of losing its only solvent and financially capable buyer that is Adani Properties Pvt Ltd,” as its agreement for sale of shares is set to expire soon.
GVK initiated arbitration proceedings to restrain Bid Services from transferring its shares. The tribunal on September 15 had restrained Bid Services from disposing or transferring its shares in MIAL until the next date of hearing.
“This order was however self-operative and self-executing: the injunction was to lapse if respondent (GVK) did not by October 31, deposit the purchase consideration for the shares (around Rs 1,248 crore) in an interest bearing no lien escrow account,” the petition filed by counsel Liz Mattews stated.
She further added that GVK has not complied with the condition and thus the restraint order by the tribunal stood vacated.
However, the GVK group had raised Rs 7,614 crore investments to primarily retire debt obligations of its holding companies and fund the purchase of additional shares in MIAL on October 27. Earlier the Delhi High Court had in July allowed South Africa’s Bidvest to sell its stake in MIAL to a third party, paving the way for the Adani group to make investment in the marquee airport. Adani has been eying to pick up stake in MIAL to mark its foray into the airport business.
GVK Airport Holdings had approached the Delhi High Court in April seeking to restrain Bidvest, a unit of Bid Services Division, from selling its 13.5% equity stake to a third party.
The company claimed to have the right of first refusal (RoFR) to purchase shares under the shareholders’ agreement signed in 2006. It had initiated a process to acquire Bid Services Division (Mauritius)’s 13.5% in MIAL during February. GVK’s offer to Bidvest was valued at Rs 1,248 crore.
