Shapoorji Pallonji Group today announced the sale of the brownfield-Gopalpur port to Adani Port and SEZ Ltd. for an enterprise value of Rs 3350 crore, confirming ET’s newsbreak.
This is the second port divestment in recent months by the construction and infrastructural conglomerate, following the earlier sale of Dharamtar Port to JSW Infrastructure Ltd. for an enterprise value of Rs 710 crore, the company said in a statement.
Deutsche Bank advised SP Group on the deal. ET had first reported on December 7 that Adani was in talks to acquire the Gopalpur Port.
The SP Group has been deleveraging through planned asset monetisation. The acquisition of Dharamtar Port in Maharashtra in 2015 and subsequent turnaround, with expected handling of 5 MTPA in FY24 from less than 1 MTPA initially has shown the group’s operational expertise, the group said in a statement.
Similarly, the Gopalpur Port acquisition in 2017, coupled with infrastructure development and efficient operations, has led to the port’s capability to handle 20 MTPA. SP Ports Maintenance, holding a 56% stake in Gopalpur Ports, awaits resolution, with Orissa Stevedores owning the remainder.
The company had raised Rs 14,300 crore through high-cost NCDs offering an 18.75% yield in June 2023 and has been facing the pressure to repay a minimum of Rs 1,500 crore by March 31, 2024, failing which the coupon rate would increase 2% to 20.75%.
The under-construction Gopalpur Port located in Odisha was acquired in 2017 with issues hampering its development.
Post acquisition, SP Group supplements port operations by building the port infrastructure and stabilising industrial relations. At present, Gopalpur Port operates at high levels of efficiency, capable of handling 20 MTPA. Further, Gopalpur Port has recently signed up with Petronet LNG for setting up a Greenfield LNG regasification terminal, adding predictable long-term cash flows for the port.
“The planned divestment of Gopalpur Port and Dharamtar Port at a significant enterprise value demonstrates the Group’s ability to turn around assets and create stakeholder value in a relatively short period of time, capitalising on core strengths in project development and construction,” said a Shapoorji Pallonji spokesperson. “These divestments are key milestones in our roadmap to reduce Group debt and set the stage for growth, taking advantage of macro trends for demand in our core business, both in India and overseas.”
Source: Economic Times