Guj Pipavav plea to raise foreign stake to 100%

Gujarat Pipavav Port Ltd has moved the foreign investment promotion board (FIPB) seeking to raise its foreign investment limit from 49 per cent to 100 per cent.

Government sources said that the Danish shipping major AP Moller group and a group of financial institutions have proposed to acquire 100 per cent stake in the company over a period of time.

The total paid up foreign equity after the complete acquisition will be close to $95 million. The total investment for planned upgradation of Port Pipavav, which includes debt, will be around $415 million.

A source in Sea King Infrastructure, the current promoter, however, said that their shareholding in the company, now around 38 per cent, will be gradually diluted in three-phases spread over around two years.

"It is an umbrella approval keeping in mind that the domestic shareholders will retain the option to sell their stake to international players in the future," the source told Business Standard.

Maersk Sealand, a part of the Danish group, will initially increase its shareholding to around 26 per cent. AP Moller will take the lead role in the company. The balance shares will be held by Port of Singapore (PSA), Sea King, CDC, AMP Australia, and New York Life.

Maersk, PSA and the consortium of financial institutions will bring in around Rs 1,100 crore into the company, which will be used to develop the port into a full-fledged container terminal. The port will have the capacity to handle 400,000 TEUs (twenty-foot equivalent units) by 2006.

Reports said that Port Pipavav handled 71,374 TEUs in the first six months of 2003.