Adani Group's port developing arm Adani Ports and Special Economic Zone (APSEZ) on Friday said it will acquire 75 per cent stake in Krishnapatnam Port Company (KPCL) in a cash deal that values the port at Rs 13,500 crore.
The acquisition of nearly 75 per cent stake from the existing shareholders of KPCL will accelerate APSEZ's stride towards 400 MMT by 2025, the company said in a statement.
The estimated enterprise value for the proposed acquisition is Rs 13,572 crore, the company said in a regulatory filing.
"Given the best-in-class infrastructure and the distinct hinterland catered by KPCL, this acquisition will not just increase our market share to 27 per cent but also add remarkable value to our pan-India footprint," company's CEO and Whole Time Director Karan Adani said.
Located in the southern part of Andhra Pradesh, KPCL is a multi-cargo facility, which handled 54 MMT in FY2018-19, the release said.
The revenue for financial year 2018-19 was Rs 2,394 crore.
"With the experience of successfully turning around acquisitions of Dhamra and Kattupalli ports, we are confident of harnessing the potential of KPCL and improve returns to stakeholders," Adani added.
He further said that that APSEZ will target to enhance cargo volume at KPCL to 100 MMT in around seven years and will double its EBIDTA in around four years through its process improvements and industry best practices.
The acquisition, which is subject to regulatory approvals, is expected to be completed in 120 days.
"The purchase consideration will be funded through internal accruals and existing cash balance," it said.
APSEZ further said that with this acquisition, credit metrics of the company on consolidated level are not expected to change.
The net debt to EBIDTA of consolidated APSEZ, including KPCL in FY2021 is expected to be around 3.2 times, which is in line with the pre-acquisition of net debt to EBIDTA of 3.1 times in FY19.
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