Source: livemint.com<\/p>\n\n\n\n
New Delhi: The Delhi high court on Monday dismissed a plea to bar South Africa\u2019s Bidvest Group Ltd from selling its stake in Mumbai International Airport Ltd (MIAL) to a third party, upsetting airport operator GVK Power and Infrastructure Ltd\u2019s plan to strengthen its defences against a hostile bid.<\/p>\n\n\n\n
The court order allowed Bid Services Division (Mauritius) Ltd, a unit of the South African company, to sell its 13.5% stake, on the grounds that GVK Power had failed to show any \u201creadiness and willingness” to buy Bidvest\u2019s stake despite it having the first right to buy the shares.<\/p>\n\n\n\n
The Adani group, which emerged as the top bidder to develop and operate all six state-run airports that were bid out earlier this year, had made a formal offer to some of the minority investors in MIAL to buy out their stakes, The Economic Times had reported in April.<\/p>\n\n\n\n
MIAL runs the Chhatrapati Shivaji International Airport in Mumbai. GVK owns a 50.5% stake in MIAL, while Bid Services Division and ACSA Global Ltd hold 13.5% and 10%, respectively. The remaining 26% is held by state-run Airports Authority of India.<\/p>\n\n\n\n
\u201cA section of the media is saying that this benefits a certain conglomerate. However, one must note that GVK group still holds the majority stake in MIAL,” said a GVK group official, who didn\u2019t want to be named. A GVK group spokesperson said the company doesn\u2019t have any comments to offer on the matter.<\/p>\n\n\n\n
India is set to become the world\u2019s third-largest air traffic market in 10 years, according to the International Air Transport Association.<\/p>\n\n\n\n
GVK has avoided \u201cscrutiny of the court” to show its financial means and capacity to complete the transaction, Justice Sanjeev Narula said in the order.<\/p>\n\n\n\n
Despite several rounds of negotiations to reach an out-of-court settlement, GVK didn\u2019t show a \u201cgenuine inclination” to complete the transaction, the court said. GVK had said it had the money needed to acquire the overseas investor\u2019s stake in MIAL but failed to prove it, said the judge.<\/p>\n\n\n\n
\u201cA party desirous of specific performance of a contract for purchase cannot merely on the strength of an agreement and purported breach seek an order of injunction,” the court ruled. \u201cThe entire case law relating to specific performance of contract ubiquitously holds that readiness and willingness is a key feature that is required to be met in order to succeed in such action. The petitioner has remained conspicuously silent on this issue in its correspondence and also before this court.”<\/p>\n\n\n\n
\u201cPetitioner\u2019s statement that it is ready to fulfil its obligations is not enough. The same has to be substantiated by its conduct and by establishing the same by means of documentary evidence,” it said.<\/p>\n\n\n\n
GVK Power had a consolidated debt of \u20b911,355.18 crore as on 31 March, according to Bloomberg.<\/p>\n