Picture: SUPPLIED
Picture: SUPPLIED

Bidvest’s sale of its stake in a joint venture that runs India’s second-busiest airport is set to be finalised in 2019 despite efforts by one of that country’s conglomerates to block the transaction.

Bidvest, which recently took a controlling stake in SA’s second-largest drugmaker, Adcock Ingram, wants to offload a 6.75% interest in Mumbai International Airport Limited (MIAL). But MIAL’s majority shareholder, GVK Power & Infrastructure, had been against the sale and argued it had a right of first refusal on Bidvest’s stake.

MIAL is a special-purpose joint venture company that runs Chhatrapati Shivaji International Airport in Mumbai, one of the busiest airports in India.

GVK, an infrastructure conglomerate that owns 50.5% of MIAL, lost a high court bid earlier in 2019 to bar the sale of the stake to a third party.

Speaking after the release of the company’s results for the year to end-June, Bidvest CEO Lindsay Ralphs said on Monday the company was confident the sale of the stake, valued at $86m, was likely to be finalised in 2019.

The MIAL stake is among assets that Bidvest had identified for disposal. Others included interests in Adcock Ingram and aviation firm Comair.

When Bidvest’s efforts to sell the Adcock Ingram shares to a black-owned entity failed, the group made a U-turn and increased its interest in the healthcare company from 43.3% to 50.1%. As a result, Advock Ingram is now a Bidvest subsidiary.

In the year ended June 30, Bidvest, whose brands include Rennies Travel and motor retailer Bidvest McCarthy, increased profit by 3.5% to R6.7bn.  

The company’s net asset value per share rose 6.4% to R75.71, while headline earnings per share grew 9.8% to 1,352.1c.

Bidvest declared a final gross dividend of 318c per share, bringing the total dividend to 600c, an increase of 7.9%.

The company said it had maintained a “conservative approach” to gearing, with net debt at R7.8bn, up from the previous R6.3bn.

It said the net debt to earnings before interest, tax, depreciation and amortisation (ebitda) — which measures the indebtedness of a company and shows the number of years it would take a company to pay back its debt if net debt and ebitda were held constant — of 0.9x provided capacity for further expansion.

The company said the acquisition of Eqstra Fleet Management and Logistics from listed industrial company enX for R3.1bn was expected to become effective towards the end of the calendar year, pending the necessary approvals.

Eqstra is a fleet-leasing and management-solutions business focused mainly on the corporate sector. At end-August 2018 it had 12,300 vehicles under lease. 

Ralphs said in the course of the past financial year the company had assessed several local and international opportunities, with some still under assessment. “We remain steadfast in our disciplines when evaluating and responding to opportunities.”

The group said it was also eyeing further large-scale investments in SA despite a tough economic environment.

“Sufficient headroom exists to continue the group’s strategy of growth in its existing markets, as well as continuing to acquire divisional bolt-on business, and to pursue larger, value-adding opportunities locally,” Bidvest said.

Internationally, the group is targeting expansion in services and commercial products.

Bidvest shares were up 2.38% at R182.96 on Monday.

njobenis@businesslive.co.za