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 Q4-FY23.

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.