According to a regulatory filing to the stock
exchanges, Adani Ports and Special Economic Zone Ltd has received approvals
from NCLT Ahmedabad and NCLT Hyderabad for acquiring the remaining 58.1 per
cent stake in Gangavaram Port Limited (GPL) through the composite scheme of
arrangement. With this stake purchase, GPL will become a 100 per cent
subsidiary of Adani Ports and Special Economic Zone Ltd (APSEZ).
“Acquisition of GPL
is a key milestone in consolidating our position as India’s largest transport
utility and in achieving East Coast & West Coast parity.
Gangavaram Port has excellent rail & road network connectivity and is the
business gateway to the hinterland spread over eight states. The recent
addition of a container handling terminal will enable us to accelerate our
growth of cargo volumes,” Karan Adani, CEO and Whole-time Director, APSEZ, said
in a statement.
APSEZ also brings world-class logistics synergies to
the table, which will propel Gangavaram Port to a potential cargo volume of 250
MMT. This will boost the pace of industrialization of Andhra Pradesh, Karan
Adani said.Gangavaram Port is located in
the northern part of Andhra Pradesh next to Vizag Port. It is the third
largest non-major port in Andhra Pradesh with a 64 MMT capacity established
under concession from the Government of Andhra Pradesh (GoAP) that extends till
2059. It is an all-weather, deep water, multipurpose port capable of handling
fully laden super cape size vessels of up to 200,000 DWT.
Currently, the port operates 9 berths and has freehold
land of 1,800 acres. With a master plan capacity for 250 MMTPA with 31 berths,
GPL has sufficient headroom to support future growthThe port handles a diverse
mix of dry and bulk commodities including Coal, Iron Ore, Fertilizer, Limestone,
Bauxite, Sugar, Alumina, and Steel. Gangavaram Port is the gateway port for a
hinterland spread over 8 states across eastern, southern and central India.
GPL will benefit from APSEZ’s pan-India footprint, logistics integration,
customer-centric philosophy, operational efficiencies, and strong balance sheet
to deliver a combination of high growth by enhancing market share and add
additional cargo types and improved margins and returns.
The acquisition of GPL is priced at around Rs 6,200
crore (517mn shares @ Rs 120/share). APSEZ has already acquired 31.5 per cent
stake in the company from Warburg Pincus and another 10.4 per cent from the
Government of Andhra Pradesh during FY22.
The acquisition of 58.1 per cent stake from DVS Raju
& family will be through a share swap arrangement and will result in
issuance of around 47.7mn APSEZ shares to the erstwhile GPL promoters. The transaction implies an EV/EBITDA
multiple of around 7.8x (FY22 EBITDA of Rs 796 crore), which is value accretive
to APSEZ shareholders from day one itself.