South Africa’s Acsa sells stake in Mumbai Airport to Adani Group for US$87.6m

SOUTH AFRICA – Airports Company South Africa (Acsa) has disposed of its 10 percent stake in India-based Mumbai International Airport Private Limited (Mial) for US$87.6 million, the government-owned company said in a statement.

Mial was one of two international airport investments that were owned by Acsa with the other in Brazil, through the Guarulhos International Airport in São Paulo.

The India-based Adani Group acquired the stake, as well as a 13.5 percent stake in Mial that was owned by Bidvest’s Bid Services Division, according IOL

Acsa made a US$80.8 million profit in the year to March 31, 2020, but it cautioned in its annual report that the disruptions to the global tourism and aviation industry that had been wreaked by the Covid-19 pandemic, and the consequent reduction in demand at airports, meant it would require new strategies and financial plans to ensure its future viability, while additional support from funders and its main shareholder the government, would be required.

The company took the initial decision to sell the stake in the India airport following the demise of Jet Airways in India in February 2019, which had led to a loss of aeronautical and non-aeronautical revenues in Mumbai International Airport.

In its 2019/2020 financial year, the airport incurred losses of US$10.8 million by handling 36 million passengers.

“Acsa will repurpose existing infrastructure and equipment until the end of their working lives; prioritise opportunities that were adjacent and complementary to its existing business such as conference facilities, transportation nodes, cargo and logistics platforms”

Acsa signed an agreement to sell the Mial shares in its 2020 financial year, and the sale announcement followed a legal challenge against Acsa’s proposed sale by the major shareholder in the airport GVK Airports Holdings, in June last year.

In Brazil, the collapse of Colombian airline Avianca, Acsa’s second equity investment, had a negative impact on aeronautical and non-aeronautical revenues and Guarulhos International Airport had reported a US$58.9 million loss and handled 44.3 million passengers in the 2019/2020 financial year.

Acsa said that in the current Covid-19 environment, it would use and repurpose existing infrastructure and equipment until the end of their working lives; develop airports biased to investments that reduce the cost of doing business; prioritise opportunities that were adjacent and complementary to its existing business such as conference facilities, transportation nodes, cargo and logistics platforms; and put capital expenditure projects that were dependent on the increase in passenger traffic, on hold.

The equity investment in Guarulhos International Airport had not returned to profitability and Acsa intended to support its return to stability.

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