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Bloomberg
Adani Enterprises Ltd is seeking a controlling stake in Mumbai’s international airport as billionaire Gautam Adani continues his aggressive push into what was until recently the world’s fastest-growing aviation market.
Adani Airport Holdings Ltd will acquire the debt of GVK Airport Developers Ltd, the holding company of GVK Power & Infrastructure Ltd, according to an exchange filing on Monday. Adani will also buy the 23.5% stake held in Mumbai International Airport Ltd by Airports Co South Africa and Bidvest Group Ltd, and then work to acquire control.
It’s a high-stakes bet on an industry that’s been brought to its knees by the coronavirus pandemic. The outbreak in India is only gathering pace, sickening more than 78,700 people on August 30 alone, a one-day record. And while budget carriers mushroomed across the South Asian nation as people took to the skies for the first time, poorer economies with rickety infrastructure and a reliance on natural resources have been hit much harder by Covid-19, casting doubt on the ability of consumer-led sectors to quickly bounce back.
Still, the airport in Mumbai, India’s second busiest with 46 million annual passengers in the 12 months through March, has been a prized possession for GVK and it’s fought hard to retain control, even attempting to buy out minority partners to ward off Adani. However high debt levels — GVK’s airports business had obligations of $781 million as of March 2019 — and a string of government investigations into financial irregularities mean the group has lost much of its bargaining power.
Adani, meanwhile, has shown his ability to navigate tricky political waters. The 58-year-old billionaire, who’s built his empire around the heavily regulated businesses of coal mining, electricity and ports, has been eyeing a slice of Mumbai airport for several years. This latest move catapults Adani Enterprises into the major league,
pitting it against GMR Infrastructure Ltd, which controls the international airport in New Delhi, India’s busiest.
Prime Minister Narendra Modi has been seeking private funds to repair and grow the nation’s creaking infrastructure, including its airports. Adani recently won other bids to operate six smaller airline hubs in the country. GVK holds a 50.5% interest in Mumbai international airport, and a 74% share in a second international airport for India’s financial capital that’s under construction.