ICICI Bank, acting through its Bahrain branch as facility agent for a consortium of lenders, has filed a suit in the Bombay High Court seeking to restrain MIAL from proceeding with the ₹3,240 crore rights issue, according to a copy of the petition filed by the bank early this month and reviewed by ET.
The bank alleged that the issue breaches the terms of an interim solution undertaking (ISU) and a share pledge agreement signed in 2017, which prohibit any dilution of pledged equity without the lender’s consent. The matter is scheduled for hearing on July 21 before justice RI Chagla.
ICICI Bank, GVK and Adani did not respond to ET’s queries.
The dispute stems from two loan facilities extended to GVK Coal Developers (Singapore). The first, amounting to $1 billion, was provided in September 2011. The second, of $250 million, was in March 2014, the petition stated. Bank of Baroda, Bank of India, Indian Overseas Bank and Canara Bank are among the other lenders involved.
These loans were secured by a pledge of 32% equity in GVK Airport Holdings (GVKAHL), representing a 16.16% indirect stake in MIAL. GVKAHL holds a 50.5% stake in MIAL, Adani Airport Holdings holds 23.5%, and the Airports Authority of India has 26%. The rights issue is being offered in a 27:10 ratio. GVKAHL is now part of the Adani Group.ICICI Bank contends that the proposed rights issue would reduce this pledged stake to about 4.37%, undermining the security provided under the loan agreements.The rights issue, approved by MIAL’s board on June 12, offers 3.24 billion equity shares at `10 each to existing shareholders. ICICI Bank says that GVKAHL informed the bank of its decision not to subscribe to issue just five days before what was to have been the offer’s closing date of July 5, citing lack of funds. The bank alleges this delay was deliberate and prejudicial to the lenders’ interests. The bank also raised concerns that the issue price of Rs 10 per share does not reflect fair market value and is instead the minimum permissible price.
MIAL is not listed. Senior counsel Venkatesh Dhond and Siddharth Ranade, partner of law firm Trilegal, are representing lenders. Senior advocate Vikram Nankani and law firm Rashmikant and Partners are representing some respondents.
The ownership structure of MIAL changed in 2021, when Adani Airport Holdings, a unit of Adani Enterprises, bought 97.97% of GVK Airport Developers, parent of GVKAHL. The bank has sought a permanent injunction against the rights issue and interim relief to prevent any share allotment or action that could affect the pledged equity, the petition stated. It has also asked that any subscription received for the rights issue should be kept in a separate account until the matter is resolved, it added.
