APSEZ to acquire controlling stake in KPCL

According to news reports, Adani Ports and Special Economic Zone Limited (APSEZ), the logistics arm of the Adani group has announced to acquire a controlling stake of 75 per cent in Krishnapatnam Port Company Ltd (KPCL) from the existing shareholders.

KPCL is located in the southern part of Andhra Pradesh, the state with the second-largest coastline in India, and is a multi-cargo facility which handled 54 MMT in FY19. This acquisition will accelerate APSEZ's stride towards 400 MMT by 2025. APSEZ is India's largest port developer, operator and the logistics arm of the Adani Group. The acquisition value of KPCL is approximately Rs 13,500 crore while the purchase consideration will be funded through internal accruals and existing cash balance. The credit metrics of APSEZ consolidated are not expected to change with this transaction. The transaction is expected to be completed in 120 days.

Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ has said that APSEZ will target to enhance cargo volume at KPCL to 100 MMT in around 7 years and will double its EBITDA in around 4 years through its process improvements and industry best practices.

He expects this acquisition will not only increase their market share to 27% but also add remarkable value to their pan-India footprint. With the experience of successfully turning around acquisitions of Dhamra and Kattupalli ports, they are confident of harnessing the potential of KPCL and improve returns to stakeholders.