Private equity firm Ascent Capital has invested Rs 200 crore in Karaikal Port Private Ltd (KPPL), a subsidiary of Chennai headquartered Marg Ltd. The funds will be used for the Marg Karaikal Port-Phase 2A expansion, which is expected to enhance its capacity from the planned 21 MMTPA to 28 MMTPA and involves an additional capex of Rs 600 crore.
KPPL had entered into definitive agreements with Ascent and as per the terms of the agreements, the latter would invest Rs 200 crore by way of secondary purchase of promoter equity shares amounting to Rs 150 crore and by way of primary infusion of Rs 50 crore by subscribing to compulsorily convertible preference shares. The deal values KPPL at Rs 1,330 crore on a pre-money basis.
Marg chairman and managing director GRK Reddy said the investment from Ascent Capital was coming at an opportune time and was a testimony to the fundamentals of the port led by a high-efficiency quotient and a strategic location that supports an ever increasing hinterland.
Ascent has completed the first tranche of its investment by purchasing Rs 125-crore worth of equity shares of KPPL from Marg Ltd and by investing an amount of Rs 32 crore by subscribing to preference shares.
At present, by way of acquiring secondary investments from Marg, the new investor Ascent would be attaining about 9.4 per cent stake in KPPL and the rest would depend on intricate and variable factors of conversion of the CCPS by the existing investor and by Marg and thereupon will get finalised, the company said.
Karaikal Port had already attracted a private equity investment by India Infrastructure Fund into KPPL during March 2010 that with the present investment by Ascent, the port has two institutional investors adding value by their infrastructure exposure and expertise to augment and fuel the ambitious growth plans of Karaikal Port.
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K E C Raja Kumar, founder & CEO, Ascent Capital, said, “Marg Karaikal Port is a promising asset. We see tremendous value in the port side of infrastructure.”
Marg Karaikal Port is a deepwater, all-weather port on the southeast coast. Awarded under BOT basis by the government of Puducherry in 2006, the port is envisaged to have a total of 9 berths capable of handling upto 47 MMTPA when fully developed. The port is to be developed in three phases with the final phase getting operational by 2016.
Marg Karaikal Port handled different types of cargo like coal, fertilizer, cement, raw sugar, project cargo, gypsum, containers, steel pipes, scarp, bagged sugar, construction material and others.