Oil and gas logistics company Aegis Logistics Ltd has agreed to sell a 19.7% stake in its wholly-owned subsidiary Hindustan Aegis LPG Company Ltd (HALPG) to an arm of Japanese trading company Itochu Corporation, a press statement said on Wednesday.
Itochu Petroleum Co (Singapore) Pte Ltd will invest Rs 250 crore ($38.75 million) in HALPG, which use the proceeds partly to develop a new LPG terminal at Haldia Port in West Bengal, the statement added.
The deal is yet to get a final nod from the Aegis Logistics board and subject to regulatory approvals.
“This investment in the new Haldia terminal is Phase 2 of our joint venture with Itochu, which we established in 2014 to grow our LPG business in India,” said Anish Chandaria, CEO and managing director, Aegis Logistics.
“The new terminal will expand our presence in the eastern region with an import capacity of up to 2.5 million metric tonnes per year,” he added.
In November 2014, Itochu and Aegis had formed a joint venture to expand the latter’s LPG sourcing and supply business. At that point, Aegis sold a 40% stake in its Singapore-based subsidiary Aegis Group International Pte Ltd to Itochu Petroleum Co (Singapore) for $5.85 million.
Aegis will use part of the proceeds to accelerate its capex programme for the next cycle of LPG import terminals after Haldia, and to continue building its “necklace of terminals” around India, it said.
At Haldia, the company has a static capacity of 25,000 metric tonnes and a throughput capacity of 2,500,000 metric tonnes, it said. The company is also expanding its LPG terminal capacity at the Pipavav port in Gujarat.
For FY17, Aegis Logistics reported a revenue of Rs 3,938 crore, up 78% from Rs 2,213 crore in FY16. It earns the bulk of its revenue from gas logistics and distribution with the remaining coming from storage and distribution of bulk liquids.
Aegis Logistics, which has a market capitalisation of Rs 6,640 crore, has seen investments from PE firms also.
In February 2011, Infrastructure India Holdings acquired a 6.3% stake in the company for around $15 million. The fund sold the bulk of its shares in August 2016 for around $35 million. When Kitara Capital went bottom-fishing earlier this month, the PE firm picked up shares in Aegis Logistics Ltd.
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