Adani scouts ports, LNG terminals overseas

Move comes after sale of Abbot Point terminal, its only foreign asset, to Adani family

Gautam Adani-owned Adani Ports & Special Economic Zone (APSEZ) has begun a serious scout for port assets in the international market, more than 18 months after it sold its Australian port assets to the Adani family, far below the purchase price.

The company has now set up a team to scour global port assets that are on the block in Southeast Asia, Africa, Canada and Australia.

“Most global ports are owned by respective governments, while terminals are run by private parties. We are only interested in acquiring ports as a whole,” a senior official close to the development told dna.

“Our interest lies in running dry bulk and container ports. We are also looking at LNG terminal operations abroad,” he added.

APSEZ’s fresh overseas expansion plan comes at the risk of increasing its debt.

Interestingly, the company, in a bid to avoid debt trap, had in March 2013 sold Abbot Point, the 50 million tonne per annum operational terminal in North Queensland (Australia).

The asset bought for A$1.829 billion (Rs 9,806 crore) in June 2011 was sold to Adani family for cash consideration of A$235.7 million (Rs 1,265 crore) and a slew of guarantees on March 30, 2013.

When the company took over the Australian asset, APSEZ had provided an unconditional guarantee of US$807 million to one of the lenders of Mundra Port Pty Ltd (MPPL), apart from providing another unconditional and irrevocable guarantee of A$22.03 million.

“The move to sell these assets to the promoter group entity stemmed from the plan to ease APSEZ from a debt burden and risks of guarantees,” a senior company official told dna.

The company’s total liabilities – both long-term borrowings as well as current liabilities -- stand at Rs 11,568.5 crore as on March 31, 2014, a shade above the previous fiscal year’s Rs 11,551.3 crore as on March 31, 2013, a day after the sale of the Australian port asset was recorded on March 30, 2013.
On March 31, 2012, APSEZ’s total liabilities stood at Rs 7,955 crore.

Mundra in Gujarat, APSEZ’s first port, has become the country’s largest commercial port in the last financial year.

The port registered 100 mt of cargo throughput during 2013-14, highest by any commercial port in India. The port has capacity to handle over 200 mt of cargo per annum.

Among the government-owned major ports, Kandla Port retained its numero uno position for the sixth year in a row by attaining 87 mt in 2013-14, thanks to high capacity utilisation at 90% of its cargo handling capacity of 96.62 mt.

During last 18 months, APSEZ has also expanded its presence to other locations such as Dahej, Hazira, Vizag and Mormugao with total nine berths. APSEZ through its special purpose vehicles (SPVs) has ongoing projects for establishing green field capacities at Kandla Port and Kamarajar Port (formerly Ennore Port) in India.

In June 2014, APSEZ completed the acquisition of 100% stake in Dhamra Port Company Limited (DPCL) though its subsidiary at an enterprise value of Rs 5,500 crore.

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