GVK signs pact to cooperate with Adani in relation to Mumbai airport

Hyderabad (Telangana) [India], Aug 31 (ANI): GVK Power and Infrastructure Ltd said on Monday that the company along with its subsidiaries GVK Airport Developers Ltd (GVKADL) and GVK Airport Holdings Ltd have agreed to cooperate with Adani Airport Holdings Ltd, the flagship holding company of Adani Group for its airports business and a subsidiary of Adani Enterprises Ltd.
The terms of cooperation include acquisition of debt by Adani from various GVK lenders including a Goldman Sachs led consortium and HDFC. The move will release GVK of various obligations, securities and corporate guarantees given in respect of debt to be acquired by Adani.
Adani will convert the acquired debt to equity of GVKADL on mutually agreed terms, subject to obtaining necessary regulatory approvals. The infusion of funds by Adani into Mumbai International Airport Ltd (MAIL) will provide liquidity support.
The financial closure will be achieved of the Navi Mumbai International Airport project by Adani at the earliest in order to commence construction, GVK said in a statement.
"The aviation industry has been severely impacted by COVID-19, setting it back by many years and has impacted the financials of MAIL," said GVK Founder and Chairman G V K Reddy.
"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 Navi Mumbai International Airport project which is a project of national importance," he said.
"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 will be reducing a significant portion of liabilities to our lenders which is of utmost importance to the group."
Separately, GVK notified the Abu Dhabi Investment Authority, National Investment and Infrastructure Fund and PSP that the transaction documents stand terminated as it is no longer effective and implementable.
GVK said the terms of transaction envisaged in the transaction documents were not implementable and the alternative proposals discussed will not provide a resolution to the lenders of ADL by August-end which was a requirement of our lenders. (ANI)