Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest port developer, operator and the logistics arm of the Adani Group, has announced that it will be acquiring a controlling stake of 75 per cent from the existing shareholders of Krishnapatnam Port Company Ltd (KPCL).
KPCL is located in the southern part of Andhra Pradesh, the state with the second largest coastline in India, and is a multi-cargo facility which handled 54 MMT in FY2019.
This acquisition will accelerate APSEZ’s stride towards 400 MMT by 2025, emphasised a release.
The acquisition value of KPCL is approximately Rs13,500 crore. The purchase consideration will be funded through internal accruals and existing cash balance.
The credit metrics of APSEZ consolidated are not expected to change with this transaction. The net debt to EBIDTA of consolidated APSEZ Ltd, including KPCL, in FY 2021 is expected to be around 3.2x (which is in line with the pre-acquisition of net debt to EBIDTA of 3.1x in FY2019).
The acquisition is subject to regulatory approvals. The transaction is expected to be completed in 120 days, the release said.
Commented Mr Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ, “KPCL is a crown jewel to join APSEZ’s string of pearls, our network of 10 economic gateways to India, and this acquisition would accelerate our stride towards FY2025 vision of handling 400 MMT of cargo. Given the best-in-class infrastructure and the distinct hinterland catered by KPCL, this acquisition will not just increase our market share to 27 per cent but also add remarkable value to our pan-India footprint.”
“With the experience of successfully turning around acquisitions of Dhamra and Kattupalli ports, we are confident of harnessing the potential of KPCL and improve returns to stakeholders.”
Mr Adani added that APSEZ will target to enhance cargo volume at KPCL to 100 MMT in around 7 years and will double its EBIDTA in around 4 years through its process improvements and industry best practices, the release highlighted.