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Buying a controlling stake in Mumbai International Airport Ltd (MIAL), the GVK unit that runs India’s second busiest airport in Mumbai, will help Gautam Adani-led Adani Enterprises Ltd, gain multiple strengths in the aviation industry which it entered last year by wining six airports that were privatised by the government on long-term lease model.
The deal will help Adani Airport Holdings Limited (AAHL), the holding company of Adani Group for airports business and a subsidiary of Adani Enterprises Limited, wrest control over the under construction Navi Mumbai International Airport Ltd (NMIAL) which is 74 per cent owned by MIAL.
It will also give Adani a 25 per cent stake in Mumbai Aviation Fuel Farm Facility Private Limited (MAFFPL), a joint venture formed to operate fuelling facilities for the Chhatrapati Shivaji International Airport (CSIA), and a 26 per cent stake in Mumbai Airport Lounge Services Private Limited (MALSPL), a jointly controlled entity that manages lounge services at the airport.
It will enable Adani pursue airport contracts in Indonesia where GVK has a management services agreement with the Airports Authority of Indonesia, (Angkasa Pura 1) to manage the non-aeronautical commercial operations at I Gusti Ngurah Rai International Airport at Bali (Denpasar), Indonesia’s second busiest international airport, for five years beginning December 1, 2012 with a right of first refusal (ROFR) for extension for another five years.
GVK has a 97 per cent stake in PT GVK Services that manage and operate commercial facilities at Bali international airport.
It may also give Adani a role in the development of a greenfield international airport at Yogyakarta in Java.
Acquiring a controlling interest in MIAL will also bestow Adani with “experience” in running airports, a point highlighted by the critics while questioning the government’s decision to hand over all the six Airports Authority of India (AAI) airports for which it quoted the highest bid to emerge the successful bidder last year.
MIAL’s experience would obviate the need for Adani to forge partnership with a globally reputed airport operator to run the airports awarded by the AAI.
This would fit well with the government’s ‘Atmanirbhar Bharat’ and ‘Make in India’ slogans.
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