Mundra's Adani buys Chennai's erstwhile rival Krishnapatnam
INDIA's biggest private deepwater port on the eastern coast, Krishnapatnam, is being sold by the CVR Group to Adani Ports for INR55 billion (US$770 million), reports Colchester's Seatrade Maritime News
INDIA's biggest private deepwater port on the eastern coast, Krishnapatnam, is being sold by the CVR Group to Adani Ports for INR55 billion (US$770 million), reports Colchester's Seatrade Maritime News.
Debt-laden Krishnapatnam Port Co Ltd (KPCL) was also hit with the abrupt cancellation by the Andhra Pradesh state government of the INR45 billion Polavaram irrigation project that put the squeeze on the Hyderabad-based group, forcing divestment.
KPCL is 90.6 per cent owned by the CVR Group, which has a highly diversified business portfolio with interests in power, steel, construction, port establishment, metro rail, bridges, IT, exports, spatial technology and applications.
London-based private equity firm 3i Group plc had invested US$161 million in February 2009 for a 26 per cent equity stake in the port. Over the past decade, 3i's stake has eroded to 9.4 per cent, currently valued at INR8.04 billion; and is trying to sell.
Adani, owner of Mumbai's rival Port of Mundra on India's west coast, will pick up a 72 per cent stake in KPCL, Chinta Sasidhar, scion of the CVR Group, will continue to hold 28 per cent.
It is predicted that the present management will continue to run the port's operations, and that Mr Sasidhar will remain in his current position.
Krishnapatnam port started operations in 2008 and is about 180 kilometres north of Chennai, it is a deep-water, all-weather port with modern facilities, and operates all 365 days of the year.
The port has a depth of 20.5 metres, and an alongside draught of 18.5 metres that can accommodate fully loaded capesize vessels of 200,000 tonnes capacity, and a transit storage area of 6,800 acres.
Krishnapatnam was originally owned by the Andhra Pradesh state government, but was given to the CVR Group for development and operations on a 30-year build-operate-share-transfer (BOST) concession, beginning September 2004.