Andhra Pradesh government has decided to sell its 10.4% stake in Gangavaram Port in favour of Adani Ports and Special Economic Zone (APSEZ) for around Rs 645 crore.
The Cabinet meeting of the YS Jagan Mohan Reddy government held on Tuesday evening, has also approved the request of APSEZ to merge with itself the modern deep seaport located on the east coast at Visakhapatnam.
The Adani group’s ports firm had initially acquired a 31.5% stake in Gangavaram Port from global private equity firm Warburg Pincus for Rs 1,954 crore in March first week. Within a couple of weeks, it bought 58.1% of the stake owned by the Gangavaram Port promoters DVS Raju’s family for Rs 3,604 crore.
After buying the holdings of the private equity firm and of the promoters, Adani group currently owns an 89.6% stake. The decision of the Andhra government to sell its minority stake will now make Gangavaram Port a fully-owned entity of Adani Group.
A Cabinet decisions note of Andhra government shared with the media said Adani group entity sought permission from the government for its purchase of 31.5% of Windy Lakeside Investment, a Warburg Pincus entity. The Adani group firm also sought the Andhra government’s nod for the merger of Gangavaram Port with APSEZ as per the terms of the shareholders’ agreement and concession agreement entered into with the state government by the port.
The Adani group entity sought to buy the 10.4% stake of Andhra government in Gangavaram Port at a price of Rs 120 a share, translating into Rs 645.1 crore, or receive shares in APSEZ worth it following the merger of Gangavaram Port.
Gangavaram Port, the second largest non-major port in Andhra with 64 million tons a year capacity and concession period till 2059, is currently handling 32-35 million tons a year. Adani group entity proposes to increase the volumes to 40-45 million tons in the short term and up to 100 million tons in the medium term with the port having a master plan capacity of 250 million tons a year.
