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Adani acquires 75% stake in Krishnapatnam Port for Rs 13,500 crore

January 4, 2020: India’s largest port developer, Adani Ports and Special Economic Zone Limited (APSEZ), will be acquiring a controlling stake of 75% from the existing shareholders of Krishnapatnam Port Company Ltd. (KPCL) for Rs 13,500 cr.

Krishnapatnam is the second-largest private sector port in India, after Mundra, and handled 54 MMT of cargo in FY 19.
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Krishnapatnam is the second-largest private sector port in India, after Mundra, and handled 54 MMT of cargo in FY 19.

January 4, 2020: India’s largest port developer, Adani Ports and Special Economic Zone Limited (APSEZ), acquired a controlling stake of 75% from the existing shareholders of Krishnapatnam Port Company Ltd. (KPCL) for Rs 13,500 cr.

The acquisition is subject to regulatory approvals. The transaction is expected to be completed in 120 days

Krishnapatnam Port
Krishnapatnam is the second-largest private sector port in India, after Mundra, and handled 54 million metric tonnes (MMT) of cargo in FY 19. It is located in Nellore district, the southernmost coastal district in the state of Andhra Pradesh. The history says that the port was operated by Vijayanagar Emperor Krishnadevaraya, hence the port was named as Krishnapatnam Port.

Adani Ports and Special Economic Zone
APSEZ, the logistics arm of Adani group, which aims for a total throughput of 400 MMT by 2025 already has 11 ports and terminals at Mundra, Dahej, Kandla and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam in Andhra Pradesh, and Kattupalli and Ennore in Chennai. The company is also developing a transhipment port at Vizhinjam, Kerala and a container terminal at Myanmar.

Adani Logistics Limited (ALL), the wholly-owned subsidiary of APSEZ has recently acquired 40.25 percent stake in Snowman Logistics Ltd. (SLL) for Rs 296 crore from Gateway Distriparks Ltd.

“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 21 is expected to be around 3.2x. (which is in line with the pre-acquisition of net debt to EBIDTA of 3.1x in FY19),” says the release.

Karan Adani, chief executive officer and whole-time director of APSEZ said, "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. 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% but also add a 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.”

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