APSEZ may buy 72 pct stake in Krishnapatnam Port Company for Rs 5,500 crore

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Published: August 20, 2019 7:36:52 AM

CVR Navayuga Group, along with family and friends, own 91% of Krishnapatnam Port and the balance 9.4% is held by the London-based equity firm 3i Group. The total amount invested for development of the port is in excess of Rs 8,000 crore.

APSEZ, Krishnapatnam Port, Krishnapatnam Port Company, industry news, infrasturcture news, KPCL The company had earlier told FE that it was looking to raise fresh funds to part-finance its expansion plans which may require over Rs 8,000 crore.

Adani Ports and Special Economic Zone (APSEZ) is likely to buy 72% stake in Krishnapatnam Port Company (KPCL), promoted by Hyderabad-based CVR Group, for approximately Rs 5,500 crore. After the acquisition, MD and chairman Chinta Sasidhar will hold the remaining 28% stake and continue to remain in his current position.

KPCL sources said due diligence is currently being worked out for the buyout plan. “The current move will ease the severe debt position of the company,” a source said without quantifying the debt levels. The company had earlier told FE that it was looking to raise fresh funds to part-finance its expansion plans which may require over Rs 8,000 crore. “We do not comment on market rumours,” an Adani spokesperson said.

CVR Navayuga Group, along with family and friends, own 91% of Krishnapatnam Port and the balance 9.4% is held by the London-based equity firm 3i Group. The total amount invested for development of the port is in excess of Rs 8,000 crore.

Incidentally, the CVR group had approached potential investors to raise up to Rs 2,000 crore in structured debt to buy out the stake held by private equity fund 3i Group. The London-based firm entered into the company in 2009 and has a 9.4% stake amounting to Rs 803.5 crore and was looking to exit.

However, legal issues prevailed between KPCL and 3i. Incidentally, group company Navayuga Engineering lost the Rs 4,500-crore Polavaram contract and Machilipatnam port project as well.

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The port with a transit storage area of 6,800 acres has the country’s largest waterfront area of 161 sq km, and a depth of 20.5 m. Its current draft of 18.5 m can accommodate full-sized cape vessel of 200,000-tonne capacity. KPCL, which was formed by winning the mandate from the Andhra Pradesh government on BOST (Build-Operate-Share-Transfer) concession basis for 50 years is being built in three phases and currently the second phase is underway.

APSEZ is the largest port developer and operator in the country and Krishnapatnam port is an all-weather deep-water port. Its present draft of 18.5 m can accommodate full-sized cape vessels of 200,000-tonne capacity. APSEZ’s 10 strategically located ports and terminals — Mundra, Dahej, Kandla and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu — represent 24% of the country’s total port capacity, handling vast amounts of cargo from both coastal areas and the vast hinterland.

KPCL had registered a 7% growth in its trans-shipment volume; clocking 20,600 TEUs for November 2018-19 compared with 19,316 TEU for the same period of the fiscal 2017-18, making it the largest trans-shipment port on the east coast of India.  Further, in order to enhance its transshipment service offerings, the port had undertaken a recent expansion programme for its container terminal — NCT (Navayuga Container Terminal). The expansion involved addition of 250 m of berth length to the existing 650 m and erecting three more
quay cranes.

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