Adani Group's Air Works deal passes stop date amid Hindenburg controversy
Adani Group's planned acquisition of Air Works, an independent MRO company, has hit a roadblock as the long stop date for the deal has passed, and there are no ongoing discussions to extend the deal timelines, according to a media report citing ratings agency Crisil. The Adani Group had previously signed definitive agreements in October last year to acquire Air Works, which operates a widespread MRO network across 27 cities in India.
image for illustrative purpose
Adani Group's planned acquisition of Air Works, an independent MRO company, has hit a roadblock as the long stop date for the deal has passed, and there are no ongoing discussions to extend the deal timelines, according to a media report citing ratings agency Crisil. The Adani Group had previously signed definitive agreements in October last year to acquire Air Works, which operates a widespread MRO network across 27 cities in India.
The acquisition was intended to strengthen Adani's presence in the airport business, as the conglomerate currently manages seven airports in the country. However, the deal came to a halt due to a major shareholder in Air Works facing liquidation. The Punj Lloyd Group, which holds a 23% stake in the company, encountered financial difficulties that led to legal delays and prevented the deal's closure.
Air Works is known for its extensive operational capabilities in defense and aerospace platforms within India. They provide base maintenance services for various aircraft, including the P-8I aircraft Phase 32 checks, Phase 48 checks, and MRO for the landing gear of the Indian Air Force's 737 VVIP aircraft. Their EASA and DGCA-certified facilities in Mumbai, Delhi, Hosur, and Kochi cater to the ATR 42/72, A320, and B737 fleet of aircraft.
The Adani Group faced a significant decline in the prices of its shares and bonds after Hindenburg Research published a critical report in January, alleging fraud by the conglomerate. The report had a substantial impact on the market value of the listed Adani firms, causing them to lose over $100 billion. However, the Adani Group vehemently denied the allegations made by the short seller.
With the long stop date passing and no discussions taking place regarding an extension of the deal timelines, it remains uncertain whether the acquisition of Air Works by Adani Group will proceed. The liquidation-related complications faced by a major shareholder have created significant obstacles, leaving the future of the deal in question.
