Engineering and construction major Shapoorji Pallonji group is in an advanced stage of talks to pick up 51% stake in Karaikal Port in Puducherry for around R900 crore. According to sources, Shapoorji will also take over a part of the outstanding debt of Karaikal Port Private Limited (KPPL), which currently stands at R1,800 crore, as part of the transaction.
While it is understood that almost the entire money raised from the sale will go towards repaying KPPL’s debt, sources added that repayment schedule of the remaining debt is still being discussed.
“Lenders are by and large comfortable with Shapoorji holding the debt for sometime but the details are being worked out at the moment but we are hopeful of closing the transaction in the next two months,” said a senior banker involved in the negotiations.
An email sent to Shapoorji Pallonji in this regard went unanswered till the time of going to the press.
Originally developed by the Chennai-based MARG group, KPPL is among the newer all weather private ports in India, which became operational in 2009. In February, however a consortium of 12-lenders of KPPL led by Indian Bank took over majority control of the company by invoking pledged shares.
Subsequently, MARG group moved the Madras High Court against the lenders and obtained an interim stay order barring the banks from further transfer of equity shares to third parties. The court, however, did not agree to a request from MARG to maintain the status of the shares prior to invocation by Indian Bank. MARG group did not respond to FE’s queries.
Regulatory filings by the port last happened in FY14, when the cargo handled by it had dropped by more than 5% to 6.23 MT with 205 major cargo vessels against 6.61 MT with 237 vessels a year before that.
The company’s term loans to the tune of R1,268 crore were restructured in FY13 with a two-year moratorium which ended in December 31, 2014 along with an additional funding of R80 crore.
In FY14 KPPL reported a net loss of R69 crore on a revenue of R263 crore.