GVK, Adani sign an agreement of cooperation for airports business

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GVK, Adani sign an agreement of cooperation for airports business
GVK Reddy, founder & chairman

Hyderabad: GVK Power & Infrastructure Limited (GVKPIL) announced that the company along with its subsidiaries, GVK Airport Developers Limited (GVKADL) and GVK Airport Holdings Limited (GVKAHL), have agreed to cooperate with Adani Airport Holdings Limited (AAHL), the flagship holding company of Adani Group, for its airports business.

The terms of cooperation include acquisition of debt by Adani from various GVK lenders including a Goldman Sachs led consortium and HDFC. Release GVK of various obligations, securities and corporate guarantees given in respect of debt to be acquired by Adani. The ability for Adani to convert the acquired debt to equity of GVKADL on mutually agreed terms, subject to obtaining necessary regulatory approvals. The agreement also includes infusion of funds by Adani into Mumbai International Airport Limited to provide liquidity support. And achieving financial closure of the Navi Mumbai International Airport project by Adani at the earliest in order to commence construction.

Commenting on the development, GVK Reddy, founder & chairman, GVK said, “The aviation industry has been severely impacted by Covid-19, setting it back by many years and has impacted the financials of Mumbai International Airport Limited. It was therefore important that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL, as well as to help achieve financial closure of the Navi Mumbai International Airport project, which is a project of national importance.” He further added, “It is under these circumstances that we agreed to cooperate with Adani so as to achieve these twin objectives. Further, when the transaction is consummated, which is subject to customary approvals, we would be reducing a significant portion of liabilities to our lenders, which is of utmost importance to the group.”

Separately, GVK has notified the Abu Dhabi Investment Authority, National Investment and Infrastructure Fund and PSP, collectively that the transaction documents stand terminated, as it is no longer effective and implementable.


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