Adani Group owned Mundra Port and Special Economic Zone (MPSEZ) on Tuesday announced acquisition of Abbot Point Port in Australia in an all cash deal for Australian $1.8 billion (Rs 9,000 crore approx). The company expects to close the deal by June 2011.
The top company officials informed that the the sale purchase agreement was signed Tuesday morning between the officials of Government of Queensland and the director of Mundra Port Pty Ltd - a fully owned subsidiary of Mundra Port SEZ Ltd in Brisbane, Australia. The company emerged as a successful bidder for the long term lease of 99 years of Abbot Point X 50 Coal Terminal (APCT) following the international competitive bidding by the state of Queensland in Australia.
Mundra Port will act as a land lord for the APCT, while the existing port operator, Xstrata is believed to continue operations post acquisition. The port currently has two fully mechanised berths capable to handle cape size vessels of over 200,000 tonnes deadweight, while the company aims to add another two berths over a period of next five years. The port has a total capacity of about 50 million tonnes. At present it has firm take or pay contracts for 50 million tonnes, with an existing handling of about 20 million tonnes.
Announcing the acquisition in Ahmedabad, B Ravi, chief financial officer, MPSEZ said: "Currently, Abbot Port has a coal cargo handling capacity of about 50 million tonnes. The acquisition would allow us to expand it further to about 80 million tonnes over a period of next five years. The port will handle coal cargos from Adani's own mines as well as from other parties. This will create ample opportunity for business."
The deal is partly funded through an acquisition debt, and a small portion of equity from MPSEZ. The balance sheet size of the company would more than double post acquisition. The revenue from the port operations are expected to nearly triple to AUD 305 million (Rs 1,470 crore approx.) by 2016 from AUD 110 million (Rs 530 crore approx) estimated for 2011. The EBITDA margins are also believed to rise from the current around 54% to about 70% after the expansions at the port in next five years.
"We have harboured aspirations to expand globally and were in search if right business opportunity with strategic fit. Abbot Point is our contribution to India's increasing global ambition and will boost synergy with other business of the group," said Gautam Adani, chairman, Adani Group in a official statement.
Adani had acquired a coal asset of Linc Energy Ltd (LNC) for about $2.7 billion (Rs 12,500 crore approx.) in August last year, gaining control of the Galilee tenement in Queensland. In past 10 years the asset base of MPSEZ across the globe has risen to about $3 billion from about $ 100 million. The group has achieved a cargo handling capacity of above 200 million tonnes per annum (MTPA) from about 2.5 MTPA in 2001.