KPCL eyes fresh investments to fuel expansion plans

By: | Published: March 29, 2016 1:06 AM

Krishnapatnam port, promoted by the Hyderabad-based CVR Navayuga group, is a privately-built and owned, all weather, deep water port located in Nellore district of Andhra Pradesh.

Krishnapatnam port, promoted by the Hyderabad-based CVR Navayuga group, is a privately-built and owned, all weather, deep water port located in Nellore district of Andhra Pradesh. Krishnapatnam Port Company Ltd (KPCL) had achieved a cargo throughput of 40 million tonne in 2014-15 and hopes to stabilise this growth during this year with about 55 million tonne in 2016-17. Talking to BV Mahalakshmi about the port’s expansion plans, Chinta Sasidhar, MD, says that the group is in the process of setting up an industrial hub in Nellore district which is estimated to cost about Rs 10,000 crore to Rs 11,000 crore. The hub will house power plants and refineries among other units. Excerpts:

What has been the investment into the port in the last seven years? Would there be a stake sale or bring in fresh investors on board?

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 Plc.  The total amount invested into the development of the port is in excess of Rs 8,000 crore. While the company’s debt equity ratio is about 3:1, we had total borrowings of Rs 6,000 crore and net worth of Rs 2,000 crore. 3i Group entered into the company in 2009 and has 9.4% stake in the company amounting to Rs 803.5 crore and is looking to exit from the company. However, there are some issues between KPCL and 3i and the matter is still pending in courts. We are looking to raise fresh funds to part-finance our expansion plans which may require over R8,000 crore. This could be a mix of equity or equity-linked instruments. A few Japanese investors have shown interest.

How are you working on your proposed plan to set up an industrial smart city?

We are planning to develop an industrial smart city adjacent to the port. We are planning for an SPV along with the state government and the Japan International Cooperation Agency (JICA) for developing this hub across 6,000 acres. This would be cargo-based industry hub. This will require about R10,000 crore-R11,000 crore and may start in a phased manner soon.

Could you elaborate about the MoU signed with Petrogas and AP government for an LNG terminal?

We signed an MoU with Petrogas and the government of AP for setting up a liquefied natural gas terminal. Petrogas Pvt Ltd, a JV company between Isomeric Holdings Bhd from Malaysia and Vijayawada-based LEPL Ventures Pvt Ltd (LEPL), signed for setting up a regasification and floating storage terminal (FST) at Krishnapatnam port with
an investment of over $500 million.

Petrogas will construct five million tonne per annum (MTPA) capacity regasification and storage plant and related ancillary facilities like floating LNG storage tanks, regasification unit, etc. in phase-I, which is expected to cost $500 million.

What are your future plans and the nature of investments for your expansion plans?

Our future investments would require about R8,000 crore over a phased manner. This would be for addition of more berths. We have plans to have about 42 berths with over 200 MTPA capacity. Besides, we are also eyeing dedicated container terminal in 600 acres, hub port for coal, agri and other commodities and also a bunkering facility.

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