Nimmagadda Prasad, whose company Matrix Laboratories has remained a prefix to his name even after he sold it to US-based Mylan in 2006, has transferred 40 per cent stake in Vanpic Ports Private Limited to the Navayuga group for an undisclosed sum.
The development assumes significance as Prasad has been made one of the respondents in the writ petitions filed against Kadapa MP YS Jagan Mohan Reddy for investing in latter's companies allegedly as a quid pro quo for getting the ambitious ports-cum industrial project. However, Prasad's counsel had denied these allegations in the AP High Court after filing a counter on Monday.
The AP government had signed a memorandum of understanding with Ras Al Khaimah in 2008 under which Vanpic Port was formed with Prasad-promoted Matrix Exports Holdings Private Limited as the Indian partner.
The project envisages development of a port-based industrial cluster park spreading across 25,000 acres land abutting coastal areas in Prakasam and Guntur districts. It also includes development of two minor ports at Vadarevu and Nizampatnam in these two districts respectively.
The government of Ras Al Khaimah of the United Arab Emirates holds 51 per cent equity in the project while the rest was with Prasad. After the share transfer, Prasad's equity in Vanpic Ports has now come down to 8.5 per cent. The company has so far invested money in acquisition of large tracts of land apart from securing most of the clearances for the proposed project.
“The Navayuga group was brought in as a strategic partner in the project owing to their experience in port development,” a senior official of Vanpic Ports told Business Standard. The official sought to delink the sale of Prasad's stake in the SPV with the ongoing controversy amidst media reports that suggested that he might exit from the project due to the present circumstances. He said the company did not require any prior approval from the government for the change in the shareholding pattern as far as the strategic partner is concerned.
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The Hyderabad-based Navayuga group, which is targeting to become a $10 billion infrastructure conglomerate in the next five years, currently operates Krishnapatnam port. The company was also selected as the concessionaire of Machilipatnam port after Maytas Infra, which headed the consortium, failed to satisfy the government of its financial capability to take the project forward.
Following the acquisition of Prasad's stake, Navayuga would be in a position to exercise its influence over maritime operations with almost half of the 975-km-long Andhra seacoast, if the three ports take shape.
Commenting on the development, a senior government official said the arrangement between Navayuga and Vanpic was discussed when YS Rajasekhara Reddy was the chief minister.
Interestingly, even while one of the ministers in the state Cabinet has named the Vanpic project in his writ petition filed against Jagan, the state investments and infrastructure department recently approved the detailed project report submitted by the developers giving a go-ahead for achieving financial closure for the same.