Karaikal Port set to rope in PE player for expansion

Jacob Ballas Capital in race for Rs 600 cr worth project.

Karaikal Port Private Limited, a subsidiary of Chennai-headquartered Marg Limited, is close to roping in third major private equity player. According to investment bankers close to Marg, Jacob Ballas Capital, a major private equity fund, which is investing from its third fund of $440 million, is understood to be one of the funds which is looking closely at the project. Marg Karaikal Port has so far raised around Rs 350 crore from IDFC Project Equity and Ascent Capital.

MARG Karaikal Port is a deep water, all weather port on the South East coast of India. Marg has been raising investments for Phase 2A expansion of its project, which will enhance the port’s capacity from the already planned expansion of 21 MMTPA to 28 MMTPA and involves an additional capital expenditure of Rs 600 crores.

Bankers indicate that Jacob Ballas Capital is likely to be looking at a secondary deal and will pick up a part of the stake owned by IDFC Private Equity. India Infrastructure Fund managed by IDFC Project Equity had during March 2010 invested Rs 150 crore in the expansion of this project. Subsequent to that, Ascent Capital has committed an additional Rs 200 crore during late 2011. Both Marg and Jacob Ballas officials did not respond to queries during a week’s time.

Investment bankers said that the proposed secondary round of funding may be in premium to what Ascent Capital invested during September 2011, during which the company was valued at Rs 1,330 crore on a pre-money basis.

According to the agreement with Ascent Capital, it would invest Rs 200 crores into KPPL by way of secondary purchase of promoter equity shares amounting to Rs 150 crores and by way of primary infusion of capital amounting to Rs 50 crore by subscribing to Compulsorily Convertible Preference Shares.

Awarded under BOT basis by the Government of Puducherry in 2006, MARG Karaikal Port when fully developed is envisaged to have a total of 9 berths capable of handling upto 47 MMTPA. The port is to be developed over 3 phases with the final phase getting operational by 2016. MARG Karaikal Port has capabilities in handling different types of cargo like coal, fertilizer, cement, raw sugar, project cargo, gypsum, containers, steel pipes, scarp, bagged sugar, construction material among others.

While this port is one of the major project for MARG Limited, it has presence spanning across the infrastructure value chain - urban and industrial infrastructure, urban residential clusters, marine infrastructure & services, malls and EPC division. The group is on an expansion mode in various sectors such as airport projects in Bellary & Bijapur and multi-level car park projects, fishing harbor at Mahe among others.