Mumbai-listed oil, gas and chemical logistics company Aegis Logistics Ltd and Dutch tank storage firm Royal Vopak announced that the two companies have joined forces in India with the aim to grow together in the LPG and chemicals storage and handling business.

The transaction entails two separate legal entities that Vopak will simultaneously buy into on the basis of joint control.

Vopak will acquire a 49 per cent shareholding in the new joint venture Aegis Vopak Terminals Ltd. Vopak’s existing CRL terminal entity in Kandla will become a wholly-owned subsidiary of Aegis Vopak Terminals. CRL is currently a 100 per cent unit of Vopak. Upon closure of the transaction, this will change to joint control as CRL will be part of Aegis Vopak Terminals.

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Aegis’ network of terminal assets at five different locations in Kandla, Pipavav, Mangalore, Kochi and Haldia covering the west and east coast of India will be added to the joint venture asset base.

Vopak will also acquire a 24 per cent shareholding in Hindustan Aegis LPG Ltd, currently a joint venture between Aegis and Itochu. After the transaction, Aegis will own 51 per cent and Itochu will continue to hold 25 per cent.

The enterprise value for Vopak’s shareholding in the joint ventures will be €185 million plus €15 million, depending on the fulfilment of certain conditions precedent. Vopak’s net consideration amounts to €100 million plus €15 million depending on the fulfilment of certain conditions.

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In addition to the net consideration, Vopak and Aegis have agreed on payment of a minimum €18 million and up to a maximum of €40 million payable to Aegis via a financial instrument, Vopak said in a statement.

Growth opportunities

The new JV, Aegis Vopak Terminals, will operate a network of eight terminals that are located in five strategic ports along the east and west coast of India. With a total capacity of around 960 thousand cubic metres, the partnership will become one of the largest independent tank storage companies for LPG and chemicals in India, Vopak said.

The JV will target mainly LPG, chemicals and industrial terminal opportunities. This investment is another step for Vopak towards its strategy to allocate capital to grow in gas markets.

“This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects, including renewables, in partnership with the world’s leading independent tank storage company,” said Raj Chandaria, Chairman of Aegis Logistics.

"This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next ten years in line with the new joint ventures and India’s ambition for LPG,” said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak.

The transaction is expected to close early 2022, subject to customary closing conditions.

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