Adani to buy L&T’s Kattupalli port at $284 mn valuation

Private port operator Adani Ports and Special Economic Zone Ltd (APSEZ) has agreed to pick up 97% stake in Marine Infrastructure Developer Pvt. Ltd (MIDPL) from Larsen & Toubro Ltd at an enterprise value of Rs 1,950 crore ($284 million).

APSEZ will pay Rs 388 crore ($57 million) to acquire the shares and will use the remaining Rs 1,562 crore ($227 million) towards settling MIDPL’s liabilities, the companies said in a stock exchange disclosure.

MIDPL runs and operates Kattupalli port. The transaction, which is expected to close in one week, has received relevant government and regulatory approvals.

With the acquisition, APSEZ plans to transform Kattupalli port into a multi-commodity port to handle cargoes like containers, automobiles, break bulk, general cargo, liquid cargo and project cargo, it said in a statement.

In November 2015, APSEZ, through its subsidiary Adani Kattupalli Port Pvt Ltd, had agreed to acquire Kattupalli port in Tamil Nadu from L&T Shipbuilding Ltd, a subsidiary of Larsen & Toubro.

At that time, the transaction hadn’t received the necessary government and regulatory approvals and L&T had yet to demerge the port business from L&T Shipbuilding, according to an APSEZ annual report.

While awaiting the approvals, APSEZ made an arrangement with L&T to operate Kattupalli port from November 2015. In 2016-17, L&T had demerged Kattupalli port into a separate entity, Marine Infrastructure Developer Pvt. Ltd.

“Adani Ports is committed to make Kattupalli one of the largest ports in southern India. We are going to start our construction to diversify the cargo of the port and will be adding 40 MMT of new capacity in the next three years,” Karan Adani, chief executive officer of APSEZ, said in the media statement.

Presently, Kattupalli has a container terminal with two berths to handle 1.2 million twenty-foot equivalent units (TEU) per annum. TEU is the metric used to measure capacity in container transportation.

APSEZ operates ports in Mundra, Hazira, Tuna Tekra and Dahej in Gujarat; Dhamra in Odisha; and Kattupalli and Ennore in Tamil Nadu. It also runs specialised coal handling facilities at Mormugao in Goa and Visakhapatnam in Andhra Pradesh, and is setting up a container trans-shipment hub at Vizhinjam in Kerala.

For the financial year 2017-18, APSEZ’s consolidated revenue from operations stood at Rs 11,322.96 crore up from Rs 8,439.35 crore in the previous year.

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