Even as Karaikal Port has admitted to insolvency, the Adani Ports and Special Economic Zone Ltd (APSEZ) is awaiting approval from a bankruptcy court in Chennai to buy the company mired in debt. APSEZ CEO Karan Adani confirmed that the group was taking over Karaikal Port at a capex of Rs 1,500 crore.
APSEZ has finally revealed the acquisition price after its bid was cleared by the lenders’ panel of Omkara Assets Reconstruction Pvt Ltd (Omkara ARC) last December.
The deal will help APSEZ firmly establish its footprints in India’s port sector where it has a presence in 12 ports/terminals across the western and eastern seaboard.
These ports are equipped to handle 580 million tonnes (mt) of cargo.
Karaikal Port will be APSEZ’s second port acquisition under India’s bankruptcy law. In 2021, it completed the acquisition of 100% Dighi Port Limited (DPL) for Rs 705 crore.
Industry experts claim that APSEZ’s acquisition of Karaikal Port is different, as the company has chosen the NCLT route. The Insolvency and Bankruptcy Code (IBC) process allows the firm to acquire the port without facing any unanticipated liabilities that could surface later.
Under the IBC code, the port can be acquired at a much lower price.
Marg Ltd, a Chennai-based infrastructure developer, held a 45% stake in Karaikal Port, while Ascent Capital Advisors India Pvt Ltd, Jacob Ballas Capital India Pvt Ltd, Affirma Capital India and GIP India, players in the private equity space, together had a 44% stake.
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