The Airports Authority of India (AAI) has sought the opinion of the Solicitor General of India on the legality of Tata Group’s plans to acquire a majority stake in GMR Airports Limited (GAL), which along with consortium members operates the New Delhi and Hyderabad airports, a person with direct knowledge of the matter told Mint.
“The AAI is looking into the legality of the transaction,” said the person requesting anonymity. “AAI has sought the opinion of the solicitor general earlier this week. This is expected to come by early next week.”
The AAI will take a decision based on the opinion of the solicitor general, the person said.
AAI’s move comes just days after the Competition Commission of India (CCI) approved a Tata Group arm, and its two overseas partners acquiring a majority stake in GAL.
According to the person mentioned above, AAI has sought the solicitor general’s opinion in the matter as Tata Group’s plans to acquire a majority stake in GAL could violate clauses that prevent airline companies in India to invest beyond a limit in airport companies.
Tata Group is also a joint venture partner of full service carrier Vistara, along with Singapore Airlines.
Mint had on 27 March reported that Tata Group and two foreign entities –GIC Private Limited and Hong Kong-based SSG group –have agreed to invest ₹8,000 crore in GMR Infrastructure Ltd’s airports business.
The deal will pump ₹1,000 crore into GMR Airports, and purchase ₹7,000 crore of the airport unit’s equity shares from the parent.
Once the deal is completed, Tata Group will hold 20% in GAL, while GIC will get 15% and SSG will own 10% in the airport unit. The deal values GAL at ₹18,000 crore.
When contacted, a GMR spokesperson was not immediately available for comments on the issue. A Tata Realty spokesperson didn’t immediately respond to an email.
Source: Mint