Adani Ports To Acquire Gopalpur Port At $369 Mln Enterprise Value

Adani Ports & Special Economic Zone Ltd. (APSEZ) agreed to acquire Gopalpur Port Ltd. at an enterprise value of 3,080 crore rupees ($369 million) to expand its presence in India.

The company, a part of Adani Group, entered into a definitive agreement to acquire a 56% stake in Gopalpur Port from SP Port Maintenance Ltd., a part of SP Group, and a 39% stake from Orissa Stevedores Ltd., India's largest private port operator said in a stock exchange announcement.

APSEZ said the acquisition will drive synergy with the company’s existing ports and strengthen its presence on the east coast of the country.

DEAL OVERVIEW

Gopalpur Port’s net liabilities stand at 1,660 crore rupees as of January 2024, APSEZ said in an investor presentation.

APSEZ will pay a total of 1,349 crore rupees to SP Port and Orissa Stevedores for the equity consideration in cash. SP Port will get 795 crore rupees, while Orissa Stevedores will receive 554 crore rupees.

Following the deal completion, Orissa Stevedores will continue as a joint venture partner in Gopalpur Port with its 5% stake in the company.

“The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our customers,” said APSEZ Managing Director Karan Adani. “Its location will allow us unprecedented access to the mining hubs of Odisha and neighboring states and allow us to expand our hinterland logistics footprint.”

Gopalpur Port, located on the east coast of India, has the capacity to handle 20 million metric tons per annum, according to the statement. The state government of Odisha awarded a 30-year concession to Gopalpur Port in 2006, with the provision of two extensions of 10 years each, it said.

GOPALPUR PORT

Gopalpur Port, as a deep draft and multi-cargo port, handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite and alumina, APSEZ said. The port is well-connected with its hinterland through the National Highway 16 and a dedicated railway line connects the port with the Chennai-Howrah main line, it noted.

The company said Gopalpur Port has received more than 500 acres of land on lease for development, with an option to receive additional land on lease to meet future capacity expansions. The concessionaire has full flexibility to design and expand the port as per the market demand, it added.

Gopalpur Port is expected to handle about 11.3 million tons of cargo in FY24 (+52% YoY), earn a revenue of 520 crore rupees (+39% YoY) and achieve an EBITDA of 232 crore rupees (+65% YoY) during the year, according to the statement.

APSEZ said Gopalpur Port is all set for strong growth and margin expansion in FY25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking, implying further value accretion for the company’s shareholders.

The transaction, likely to be completed by the first quarter of FY25, is subject to statutory approvals and fulfilment of other conditions.

Note: $1 = 83.4488 Indian rupees

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