Mumbai airport stake: Changi, ADIA among potential bidders

GVK Group is in talks with at least four companies to sell a significant minority stake in Mumbai International Airport Pvt. Ltd (MIAL), two people directly aware of the discussions said.

Four of the potential bidders, namely Singapore’s Changi Airport, German airport operator AviAlliance, India’s sovereign wealth fund National Investment and Infrastructure Fund (NIIF) and Abu Dhabi Investment Authority (ADIA) are in advanced negotiations to buy a stake in MIAL, the people cited above said, requesting anonymity as the talks are private.

The interested parties are expected to make non-binding offers by September 10 when an internal deadline set by Citigroup, which is managing the transaction, ends, the people said.

Alongside GVK Group, South Africa’s Bidvest Group, which has about a 13.5% stake in MIAL has also begun a parallel process to sell its entire stake, said the two people cited above.

GVK’s plan to sell a stake in MIAL is part of its efforts to deleverage and free up cash for new projects such as the ongoing second airport in Mumbai.

GVK Power & Infrastructure Ltd, which runs the airport business through GVK Airports Holdings Pvt. Ltd, had a debt of ₹12,854 crore at the end of March. “The group is looking to raise anywhere between ₹4,000 crore to ₹6,000 crore from the transaction and will continue to retain a stake in MIAL post the deal,” the first person cited before said. “The transaction value will depend on the overall valuation of MIAL, which is expected to be around ₹16,000 crore or more.”

The second person cited before said “all the four bidders have been given data room access by GVK so that they can finalize their respective bids”.

MIAL runs the Chhatrapati Shivaji International Airport— one of the busiest in India—as a special purpose joint venture company. A consortium led by GVK holds a 74% stake in Mumbai airport. GVK owns a 50.5% stake, while the Bidvest Group, and Airports Co. South Africa Ltd hold 13.5% and 10%, respectively. The remaining 26% is held by state-run Airports Authority of India (AAI).

Under a 30-year concession, the government granted MIAL the right to operate, maintain and develop Chhatrapati Shivaji International Airport. The airport services the Mumbai metropolitan area. In, 2010, GVK acquired a 13.5% stake from Bidvest paying around ₹650 crore. State-run AAI has the right to buy stakes in MIAL, according to previously agreed terms, before it’s sold to a third party. Responding to a query from

Mint, a spokesperson for Bidvest Group confirmed the development and said the group was looking to exit its investment in MIAL.