• Krishnapatnam Port is located on southern part of Andhra Pradesh coast line.
• Krishnapatnam Port is the second largest private sector port in India, after Mundra, and handled 54 MMT of cargo in FY 19.
• We expect the port to grow to 100 MMT in around 7 years.
• This acquisition will accelerate APSEZ's path to 400 MMT.
• This is the largest acquisition by APSEZ till date and is valued at approx. Rs.13,500 cr. with an FY19 EBITDA of approx. Rs.1,350 cr.
• We expect the EBIDTA to double in around 4 years.
• APSEZ's market share will increase from 22% to 27% on pan India basis.
• The purchase consideration will be funded through internal accruals and existing cash balance.
Ahmedabad, 3rd January, 2020
Adani Ports and Special Economic Zone Limited ("APSEZ"), India's largest port developer, operator and the logistics arm of the Adani Group will be acquiring a controlling stake of 75% from the existing shareholders of KPCL.
KPCL is located in the southern part of Andhra Pradesh, the state with the second largest coastline of in India, and is a multi-cargo facility which handled 54 MMT in FY19.
This acquisition will accelerate APSEZ's stride towards 400 MMT by 2025.
Acquisition value of KPCL is approximately Rs.13,500 cr. The purchase consideration will be funded through internal accruals and existing cash balance.
The credit metrics of APSEZ consolidated are not expected to change with this transaction. The net debt to EBIDTA of consolidated APSEZ Ltd. including KPCL in FY 21 is expected to be around 3.2x. (which is in line with the pre-acquisition of net debt to EBIDTA of 3.1x in FY19)
The acquisition is subject to regulatory approvals. The transaction is expected to be completed in 120 days.
Mr. Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ said, "KPCL is a crown jewel to join APSEZ's string of pearls, our network of 10 economic gateways to India and this acquisition would accelerate our stride towards FY2025 vision of handling 400 MMT of cargo. Given the best-in-class infrastructure and the distinct hinterland catered by KPCL, this acquisition will not just increase our market share to 27% but also add remarkable value to our pan-India footprint.
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.” Mr. Adani added that APSEZ will target to enhance cargo volume at KPCL to 100 MMT in around 7 years and will double its EBIDTA in around 4 years through its process improvements and industry best practices.
Adani Ports, press release