Adani Ports and Special Economic Zone (APSEZ) is acquiring Krishnapatnam Port Company (KPCL) in an all-cash deal for an enterprise value of Rs 13,572 crore.
The Adani group firm, which has interests in port infrastructure and logistics services, on Friday said it will acquire 75 per cent from the existing shareholders of KPCL.
Located in the southern part of Andhra Pradesh, KPCL is a multi-cargo facility, which handled 54 million tonnes in 2018-19. The acquisition is expected to accelerate APSEZ’s vision of attaining the target of handling 400 million tonnes by 2025.
“Given the best-in-class infrastructure and the distinct hinterland catered by KPCL, this acquisition will not just increase our market share to 27 per cent but also add remarkable value to our pan-India footprint,” CEO and whole-time director Karan Adani said.
Incorporated in March 1996, KPCL is engaged in the business of handling containers, coal and other bulk cargo, including liquid cargo. It posted revenues of
Rs 2,934 crore in 2018-19, up from Rs 1,969 crore in the previous year. The transaction is expected to be completed in 120 days.
The consideration will be funded through internal accruals and existing cash balance.
APSEZ, however, added that despite the major acquisition, its credit metrics at a consolidated level is unlikely to change.
Net debt to EBIDTA at a consolidated level is projected to be 3.2 times, which is in line with the net debt to EBIDTA of 3.1 times in 2018-19.
“With the experience of turning around acquisitions of Dhamra and Kattupalli ports, we are confident of harnessing the potential of KPCL and improve returns to stakeholders,” Adani said.
He said APSEZ will try to raise cargo volume at KPCL to 100 million tonnes in around seven years and will double its EBIDTA (earnings before interest, depreciation, taxes and amortisation) in around four years through its process improvements and industry best practices.
APSEZ has 11 ports and terminals, which include those at Mundra, Dahej, Kandla and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam in Andhra Pradesh, and Kattupalli and Ennore in Chennai.