Adani buys Ocean Sparkle in Rs 1,500cr deal
Ocean Sparkle's biz model provides for long-term cash visibility on take-or-pay deals with avg contract life of 7+ years
Adani Ports & Logistics, through its wholly-owned subsidiary The Adani Harbour Services, has signed an agreement to buy 100 percent stake in Ocean Sparkle (OSL). It has also signed an agreement to buy 100 percent stake in Savi Jana Sea Foods, according to an official statement issued to the Bombay Stock Exchange.
OSL is India's leading third party marine services provider, and engaged in the business of port operations and marine services. Key activities carried by OSL include towage, pilotage and dredging services. The Company has an asset base of 94 owned vessels and 13 third-party owned vessels, the statement added.
The deal will cost Adani Ports Rs 1,530 crore ($218 million), and is likely to be closed within a month.
Apart from India, OSL operates in Sri Lanka, Saudi Arabia, Yemen, Qatar and Africa, and had reported a consolidated revenue of Rs 622 crore ($88 million) for FY2021.
OSL was established in 1995 by a group of marine technocrats with P Jairaj Kumar as the chairman and managing director. Kumar will continue as the Chairman of the OSL board.
"Given the synergies of OSL and Adani Harbour Services, the consolidated business is likely to double in five years with improved margins, thereby creating significant value for APSEZ's shareholders." says Karan Adani, CEO and Whole-time Director, APSEZ. "This acquisition not only provides APSEZ a significant share of India's marine services marketbut also provides us a platform for building presence in other countries, thereby facilitating APSEZ's journey towards becoming the largest port operator globally by 2030 and largest integrated transport utility in India."
OSL has long-standing relationships with contracts ranging from 5 to 20 years (average length of contracts is ~7 years). The contracts are on Take or Pay (TOPA) basis, thereby providing robustness to OSL's business model. The company has presence in all the major ports, 15 minor ports and all the three LNG terminals in India, the statement said.