The Shapoorji Pallonji Group on Tuesday announced the sale of its brownfield Gopalpur Port to Adani Ports and SEZ Ltd for an enterprise value of Rs 3,350 crore, as part of its deleveraging strategy with planned asset monetisation.
The under-construction Gopalpur Port in Odisha was acquired in 2017 by the SP Group.
Currently, it is capable of handling 20 MTPA. The port had recently signed up with Petronet LNG for setting up a greenfield LNG regasification terminal, adding predictable long-term cash flows for the port, the group said in a statement.
The sale of the Gopalpur Port is the second port divestment in the last few months from the SP Group, a diversified construction and infrastructure, real estate and energy conglomerate.
It had earlier divested its Dharamtar Port in Maharashtra to JSW Infrastructure Ltd for an enterprise value of Rs 710 crore.
The group had acquired the Dharamtar Port in 2015 and had successfully turned around port operations, increasing capacity from less than 1 MTPA, when it took over to an expected capacity to handle 5 MTPA in FY24.”The planned divestments of Gopalpur Port and Dharamtar Port, at a significant enterprise value, demonstrate our group’s ability to turn-around assets and create stakeholder value in a relatively short period of time, capitalising our core strengths in project development and construction,” a Shapoorji Pallonji Group spokesperson said.
The spokesperson further said, “These divestments are key milestones in our roadmap to reduce group debt.”
and set the stage for growth, taking advantage of the macro trends for demand in our core businesses, both in India and overseas.”
The SP Group has been looking at several ways to reduce its debt, which has been reported to be around Rs 20,000 crore.
Adani Ports and Special Economic Zone Ltd (APSEZ) in a separate statement also said that it has entered into a definitive agreement to purchase the 56 per cent stake of the SP Group and 39 per cent of Orissa Stevedores Limited (OSL) in Gopalpur Port Limited (GPL).
The equity consideration for 95 per cent stake is Rs 1,349 crore, with an enterprise value of Rs 3,080 crore, subject to closing adjustments.
Commenting on the development, APSEZ managing director Karan Adani said, “The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our customers.”
Adani added that its location will allow APSEZ unprecedented access to the mining hubs of Odisha and neighboring states and allow us to expand our hinterland logistics footprint.
In FY24, GPL is estimated to handle about 11.3 MMT cargo (YoY growth of 52 per cent) and earn a revenue of Rs 520 crore (YoY growth — 39 per cent) and achieve EBITDA of Rs 232 cr (YoY growth - 65 per cent).
“In our view, the Gopalpur Port is all set for strong growth and margin expansion in FY’25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking, implying further value accretion for APSEZ shareholders,” APSEZ said.
According to the APSEZ statement, the Odisha government had awarded a 30-year concession to GPL in 2006, with the provision of two extensions of 10 years each.
As a deep draft, multi-cargo port, Gopalpur handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina. The port plays an important role in supporting the growth of mineral-based industries in its hinterland, like iron & steel, alumina and others.
APSEZ is a part of the globally diversified Adani Group.
It is the largest port developer and operator in India with seven strategically located ports and terminals on the west coast (Mundra, Tuna, Dahej, and Hazira in Gujarat, Mormugao in Goa, Dighi in Maharashtra and Vizhinjam in Kerala).
It has seven ports and terminals on the East coast of India (Haldia in West Bengal, Dhamra in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu and Karaikal in Puducherry, representing 27 per cent of the country’s total port volumes.
