Adani Port submits initial bid to buy debt-laden Karaikal Port, Infra News, ET Infra | Whuff News

Adani Port submitted an initial bid to buy the debt-laden Karaikal Port

MUMBAI: Adani Ports and Special Economic Zone Ltd (APSEZ) has made an initial bid to buy distressed port company Karaikal Port Pvt Ltd which is undergoing resolution under India’s bankruptcy laws, multiple sources said.

Karaikal Port Pvt Ltd runs the all-weather Karaikal port developed in Build, Operate and Transfer (BOT) format under Public Private Partnership (PPP) mode on a 30-year concession awarded by the Puducherry government. This port started operating in June 2009.

A potential deal for Karaikal would add to APSEZ’s presence on India’s east coast where it acquired Krishnapatnam and Gangavaram ports in the last two years. APSEZ also runs ports/terminals at Dhamra, Kattupalli and Ennore.

On the West coast, APSEZ operates ports/terminals at Mundra, Tuna, Dahej, Hazira, Dighi and Mormugao.

The 12 ports/terminals operated by APSEZ on the east and west coasts have the capacity to handle a combined 538 million tonnes (mt) of cargo per year.

APSEZ handled 312 mt of cargo in FY22 at a capacity utilization of 58 percent compared.

“In three years, we expect to increase our cargo volume by 60 percent to 500 mt as we aim to emerge as the world’s largest port operator and India’s largest transport utility by 2030,” Karan Adani, CEO, APSEZ, said in a report. firm’s annual for FY22.

The Chennai-bench of the National Company Law Tribunal (NCLT) initiated the corporate insolvency resolution process against a private port located in Puducherry promoted by Marg Ltd on April 29 this year on a petition brought by Omkara Assets Reconstruction Pvt Ltd (Omkara ARC) who wanted recover unpaid dues of Rs2,804.56 crores.

In November last year, Edelweiss Asset Reconstruction Co Ltd (EARC) sold a debt of Rs2,059.24 crore along with the 11 per cent equity it held in Karaikal Port Pvt Ltd to Omkara ARC for Rs1,500 crore. Omkara ARC is now in charge of Karaikal port.

The Swiss Challenge auction by Edelweiss ARC of the Karaikal Port debt was prompted by an offer from Omkara ARC, which is believed to have the backing of APSEZ.

Earlier this year, Omkara ARC had appointed Adani Group stalwarts Ameet Desai and Surender Kumar Tuteja as its representatives on the Karaikal Port board, reinforcing industry and market speculation that APSEZ had struck a deal for an all-weather port in Puducherry promoted by banker-turned-entrepreneur GRK Reddy .

The speculation gained credence after Omkara ARC hired Vettath Raghunandan and Nilanjan Bhattacharya – who had previously been associated with the Adani Group in senior roles – to run Karaikal Port as chief executive officer and chief financial officer, respectively.

Unlike a formal acquisition agreement, APSEZ, according to industry sources and experts, can use the NCLT route to buy Karaikal Port as the IBC process allows India’s largest port operator to buy the port on a “clean slate” without having to face any contingencies. liabilities that may arise after the acquisition.

Moreover, the port can be acquired at a much lower price under the IBC.

“The Karaikal port is a done deal for APSEZ,” said a port industry executive with knowledge of the matter. “Adani has mobilized executives on the ground to run the port and its board before the sale through NCLT”, he added.

ET Infra could not independently ascertain whether the expressions of interest floated by resolution professionals for Karaikal Port, had attracted any other bidders.

Port industry sources, however, said that speculation about APSEZ’s “linkage” with Karaikal Port could prevent other potential bidders from participating in the settlement process.

Also, by holding a 96 percent voting share in the Committee of Creditors (CoC), Omkara ARC has the right to decide the outcome of the Karaikal Port resolution plan, said the port industry executive cited earlier.

Chennai-based infrastructure developer Marg Ltd, promoted by Reddy, holds a 45 per cent stake in Karaikal Port while four private equity funds – Ascent Capital Advisors India Pvt Ltd, Jacob Ballas Capital India Pvt Ltd, Afirma Capital India and GIP India – are jointly owned 44 percent interest.

If successful in the bid, Karaikal Port could be APSEZ’s second port acquisition under India’s bankruptcy laws after Dighi port in Maharashtra.

Resolution professionals for Karaikal Port and APSEZ could not immediately be reached for comment.

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