Aegis Logistics and the Netherlands’ Royal Vopak today announced that the companies have decided to join forces in India with the aim to grow together in the LPG, chemicals storage and handling business.
The new partnership, Aegis Vopak Terminals Ltd (AVTL), will operate a network of terminals that are currently located in five strategic ports along the east and west coast of India.
“This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects including renewables, in partnership with the world’s leading independent tank storage company,” said Raj Chandaria, chairman, Aegis Logistics.
"This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next 10 years in line with the new joint ventures and India’s ambition for LPG,” said Eelco Hoekstra, chairman of executive board and chief executive officer of Royal Vopak.
The transaction is expected to close early 2022 subject to customary closing conditions.
The statement said that the transaction entails two separate legal entities that Vopak will simultaneously buy into on the basis of joint control. In the Aegis Vopak Terminals Ltd entity, Vopak will acquire a 49% shareholding. Vopak's existing CRL terminal entity in Kandla will become a wholly owned subsidiary of Aegis Vopak Terminals Ltd.
Aegis’ network of terminal assets at 5 different locations in Kandla, Pipavav, Mangalore, Kochi and Haldia covering the West and East coasts of India will be added to the JV asset base.
In the Hindustan Aegis LPG Ltd entity, Vopak will acquire a 24% shareholding. This is currently a joint venture between Aegis and Itochu. After the transaction Aegis will own 51% and Itochu will continue to hold 25% stake.
Aegis will continue to retain 100% ownership of its Mumbai liquid and LPG terminals and its LPG retailing business.
The enterprise value for Vopak’s shareholding in the joint ventures will amount to €200 million. In addition to a net consideration at closing of €115 million, Vopak and Aegis have agreed on the following -- a payment of a minimum €18 million and up to a maximum of €40 million payable to Aegis via a call and/or put option in 2025.
Aegis will receive total gross pre-tax cash proceeds from the sale of up to Rs 2,766 crore.