Logistics

Adani Ports to raise $1.25 billion through dollar bonds to part-fund Krishnapatnam deal

Our Bureau Mumbai | Updated on July 07, 2020 Published on July 07, 2020

KPCL runs a private deep-water port at Krishnapatnam in Andhra Pradesh’s Nellore district   -  THE HINDU

Adani Ports and Special Economic Zone Ltd (APSEZ) will raise $1.25 billion through dollar bonds to part fund the acquisition of Krishnapatnam Port Co Ltd.

The fund-raising plan was approved by the board of APSEZ on Tuesday, the company said.

On January 3, APSEZ signed an agreement to buy a 75 per cent stake in Krishnapatnam Port Co Ltd for an enterprise value of ₹13,572 crore, comprising equity component of ₹7,360 crore and debt of ₹6,212 crore.

KPCL runs a private deep-water port at Krishnapatnam in Andhra Pradesh’s Nellore district. It is the largest port in Andhra Pradesh and the second largest private port in India after Mundra, by volumes handled.

The deal is APSEZ’s biggest acquisition yet in India’s port sector in terms of value and size and helps it build scale in an industry that is dominated by the 12 state-owned ports.

Also read: High drama in the run up to Adani-Krishnapatnam port deal

The acquisition will give APSEZ, India’s biggest private port operator, access to the country’s largest waterfront area (for a port) of 12.5 km and a transit storage area of 6,790 acres of which 4,621 acres is in possession and the balance 2,169 acres has to be acquired from the State government. The port started operations in 2008.

Krishnapatnam, a port owned by the Andhra Pradesh government, was given to the Hyderabad-based CVR Group for development and operations on a 30-year contract beginning September 2004. The port contract can be extended up to 50 years (30+20 years).

At the time of the acquisition, APSEZ said the equity portion of the deal will be fully funded through internal accruals and cash.

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Published on July 07, 2020
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