To recover MIAL dues, banks name top law firm as advisor

P. Manoj | | Updated on: Dec 06, 2021

A file picture of the GVK Lounge in Mumbai Airport | Photo Credit: SHASHI ASHIWAL

Cyril Amarchand Mangaldas to negotiate deal; GVK firm owes lenders ₹9,782 crore

Lenders to Mumbai International Airport Ltd (MIAL), the GVK unit that runs India’s second busiest airport, have agreed to hire law firm Cyril Amarchand Mangaldas as advisor to work out a negotiated settlement to recover their dues. This comes even as GVK group is in talks with Adani Group to sell its stake in MIAL.

MIAL owes banks ₹9,782 crore and has ₹2,000 crore in non-convertible debentures. State Bank of India is the lead lender to MIAL. Other lenders include HDFC Bank and Axis Bank. The banks did not comment on queries sent by BusinessLine.


“Instead of each entity appointing its own advisor, all have agreed to hire Cyril Amarchand Mangaldas as the single advisor to negotiate a settlement between banks, buyer and seller,” a person aware of the plan said.

Last week, rating agency Crisil downgraded MIAL’s debt instruments citing low cash flows against debt servicing requirements. A spokesperson for Cyril Amarchand Mangaldas said the firm would not comment on clients.


BusinessLine reported on Saturday that Gautam Adani-led Adani Enterprises Ltd had started talks to buy a majority stake in the airport operating company from the financially stressed GVK Group. GVK owns just under 51 per cent stake in MIAL. The Adani Group could end up with 74 per cent stake in MIAL after acquiring shares held by South African minority investors — Bidvest and Airport Company South Africa. The deal will also give Adani Group control over the Navi Mumbai airport, which is under construction.

CBI probe

The Central Bureau of Investigation (CBI) has started a probe against the GVK Group and its parent company GVK Holdings on allegations that MIAL siphoned off ₹705 crore through bogus contracts, under-reported revenues, misused reserves for the holding company by allowing premium retail spaces to family and relatives at lower rates and by booking “exuberantly expensive” air and train travel for employees and those close to GVK Holdings. In addition, the FIR alleges that the accused have also caused huge unquantified loss to the Airports Authority of India by inflating the expenditure of MIAL and by under-reporting the revenue.

The Enforcement Directorate has also filed a preliminary money laundering case against MIAL and GVK Holdings.

(With inputs from Surabhi)

Published on August 26, 2020
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you