Adani Group plans to raise $1 billion via sale of equity to fund takeover of Mumbai airports

Mumbai: The Adani Group is planning to raise at least $1 billion through the sale of equity to fund the takeover of two Mumbai airports from GVK Group, said people with knowledge of the matter.The conglomerate is currently in talks with about four global wealth funds, including Qatar Investment Authority (QIA) — a partner in Adani Electricity— as well as a Canadian and a Singapore-based fund. Adani Airport Holdings will likely sell a 10-20% holding to raise the funds, said the people cited above. QIA could be a frontrunner, they said. An investment banker had also approached the group on behalf of another large sovereign wealth fund from the Middle East, said one of them.“As part of our company policy, we do not comment on market speculation,” a spokesperson said. QIA didn’t comment. Investment bankers including Morgan Stanley, Citi, JPMorgan are in discussions with the Adani Group on managing the sale, sources said. The banks couldn’t be contacted immediately for comment.Adani has already won bids to develop six other airports. “The addition of the Mumbai International Airport and the Navi Mumbai International Airport to our existing portfolio provides us a transformational platform that will help shape and create strategic adjacencies for our other B2B businesses,” Adani Group chairman Gautam Adani said in a separate press statement on Wednesday.To Acquire Rs 13,500 Crore DebtThe Navi Mumbai facility is awaiting the start of construction.The Adani Group has signed concession agreements for Ahmedabad, Lucknow and Mangaluru but has sought and secured additional time from the state-run Airports Authority of India to take over the airports as the Covid-19 pandemic has impacted business. A person close to the development said it has paid Rs 375 crore as bank guarantees for two airports and will make the payment for the third either on Wednesday or Thursday. The remaining three — in Thiruvananthapuram, Jaipur and Guwahati — have received cabinet approval for privatisation. The Adani Group is expected to sign concession agreements for them soon.Together, the seven airports handled close to 75 million domestic and international passengers in FY20. Adani will acquire debt close to Rs 13,500 crore on the books of GVK’s airport business, said people with knowledge of the matter. The group will use the proceeds of the proposed equity infusion to pay part of the amount, they said.“The group is appropriately leveraged as it gears up for large-scale expansion spanning across infrastructure to green energy,” said a senior executive, who has long been associated with the group on fundraising exercises.The Adani Group will acquire 74% in MIAL (Mumbai International Airport Ltd). That includes GVK’s 50.5% stake, 10% belonging to Airport Company of South Africa and the 13.5% holding of South African Bidvest. The remaining 26% will stay with the Airports Authority of India.GVK Power and Infrastructure agreed to cede control after a lengthy faceoff with Adani and other investors. The company buckled under pressure from lenders as the Covid-19 pandemic ravaged its business, hurting revenues.“From a medium to long-term perspective, Mumbai is well on its way to becoming one of the top five global metropolitan centers of the 21st century,” Gautam Adani said in the press statement.

from Economic Times https://ift.tt/3bkiAxf