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Adani Ports and Special Economic Zone Ltd (APSEZ) has concluded the acquisition of the Andhra Pradesh government’s 10.4 per cent stake in the Gangavaram Port Limited (GLP), for a consideration of ₹645 crore. This concludes the ₹6,200-crore acquisition of the port on east coast by the Gujarat-based ports major.
In a statement issued on Wednesday, APSEZ informed that the company's Board of Directors and GPL have approved a merger at a swap ratio of 159:1000 shares.
The transaction has been completed at an equity value of around ₹6,200 crore and implies an EV/ fiscal 2021 EBTIDA multiple of around 8.8x and results in EPS accretion of about 7 per cent to APSEZ fiscal 2021 earnings, it added.
The merger takes into "consideration GPL’s valuation of ₹120 per share and fair value of APSEZ at ₹754.8 per share, resulting in a swap ratio of 159 shares in APSEZ for 1,000 shares in GPL for 58.1 per cent stake held by DVS Raju and Family in GPL," the statement said.
The merger, which has an appointed date of April 1, 2021, is subject to NCLT approvals and is expected to conclude by March 31, 2022.
Post the merger of GPL and APSEZ, DVS Raju and family will receive approximately 4.8 crore shares, resulting in around 2.2 per cent stake in APSEZ worth ₹3,604 crore.
Earlier, in April, APSEZ had acquired 31.5 per cent stake from Windy Lakeside Investment Ltd, a Warburg Pincus affiliate, and had signed an agreement for controlling stake of 58.1 per cent held by DVS Raju and Family.
"We are committed to accelerating the industrialization of Andhra Pradesh," said Karan Adani, CEO and Whole Time Director of APSEZ.
He stated that the network of ports that being developed allows the group to create an integrated mesh of logistics capabilities to deliver an unmatched set of services to the customers. "Gangavaram is a major part of this mesh in one of India’s fastest growing states. We are excited about the growth prospects of GPL, which is core to our east coast expansion strategy. GPL is advantageously located to allow us unprecedented access to the largely untapped hinterland market."
GPL, a debt-free port, is a 64-million tonnes (MT) capacity non-major port established under concession from Government of Andhra Pradesh (GoAP) that extends till 2059 and is the gateway port for a hinterland spread over 8 states across Eastern, Western, Southern and Central India.
The deep draft modern multipurpose port is capable of handling fully laden Super Cape size vessels of up to 200,000 DWT, GPL handles a diverse mix of dry and bulk commodities including Coal, Iron Ore, Fertilizer, Limestone, Bauxite, Sugar, Alumina, and Steel.
During the fiscal 2020-21, GPL reported a cargo volume of 32.8 MT, revenue of ₹1,057 crore and EBITDA of ₹625 crore with net profit of ₹494 crore.
In the first quarter of current fiscal, GPL handled 8.7 MT of cargo and reported revenue of ₹313 crore, EBITDA of ₹215 crore and PAT of ₹192 crore.
APSEZ shares ended at ₹744.70, down by 0.63 per cent on BSE Wednesday.