The Adani Group has halted the proposed Rs 400-crore acquisition of maintenance, repair and overhaul (MRO) company Air Works owing to a major shareholder in the target entity being forced into liquidation, said a report on Friday.
Adani Group was unable to close the deal as the Punj Lloyd Group, which holds 23% stake in the company, went under liquidation, causing inordinate legal delays in closing the deal, reported Economic Times citing sources.
The report said that a Memorandum of Understanding (MoU) signed between Air Works and the Adani Group to close the deal has already expired twice, and the latest deadline was set in Q4FY23.
Last year in October, Adani Defence Systems & Technologies Ltd. (ADSTL) had signed definitive agreements to acquire Air Works, a highly diversified independent MRO with the largest pan-India network presence across 27 cities.
Air Works has developed extensive operational capabilities within the country for key defence and aerospace platforms. From the first P-8I aircraft Phase 32 checks to Phase 48 checks and MRO on the landing gear of the Indian Air Force’s 737 VVIP aircraft, Air Works undertakes base maintenance for ATR 42/72, A320 and B737 fleet of aircraft from its EASA and DGCA-certified facilities at Mumbai, Delhi, Hosur and Kochi.
Adani Group’s bonds and shares tumbled after Hindenburg Research released a critical report in January that accused it of fraud. The listed Adani firms lost over $100 billion in market value due to the scathing report. The ports-to-power conglomerate has vehemently denied the short-seller’s allegations.