Khaitan & Co acted as legal advisors in the divestment of 58.1% stake in Gangavaram Ports Limited to Adani Ports & Special Economic Zone Limited (“APSEZ”) for INR 3604 crore.
ABOUT THE TRANSACTION
GPL is located in the northern part of Andhra Pradesh next to Vizag Port. It is the second-largest non-major port in Andhra Pradesh with a 64 MMT capacity established under a concession from the Government of Andhra Pradesh (GoAP) that extends till 2059. It is all-weather, deep water, multipurpose port capable of handling fully laden super cape size vessels of up to 200,000 DWT. Currently, GPL operates 9 berths and has freehold land of ~1,800 acres. With a master plan capacity of 250 MMTPA with 31 berths, GPL has sufficient headroom to support future growth.
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APSEZ to acquire a controlling stake of 58.1% in Gangavaram Port Ltd (GPL) from DVS Raju and family for Rs. 3,604 Cr taking its stake in GPL to 89.6%.
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GPL, with its strategic location and strong hinterland, has the potential to become a 250 MMT port.
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GPL will benefit from APSEZ’s platform to improve market share, enhance cargo and improve operating efficiencies.
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APSEZ through its 2 AP ports (Krishnapatnam & Gangavaram) will be able to offer enhanced solutions to its customers.
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This acquisition continues the strategy of APSEZ to transform into a pan India cargo utility from a predominantly west coast port company.
The Adani Ports and Special Economic Zone (APSEZ) Ltd., India’s largest private Ports & Logistics company and the flagship transportation arm of the diversified Adani Group. APSEZ had announced the acquisition of Warburg Pincus’s 31.5% stake in GPL on March 3, 2021, and together with this acquisition, APSEZ would have an 89.6% stake in GPL.
GPL is located in the northern part of Andhra Pradesh next to Vizag Port. It is the second-largest non-major port in Andhra Pradesh with a 64 MMT capacity established under a concession from the Government of Andhra Pradesh (GoAP) that extends till 2059. It is all-weather, deep water, multipurpose port capable of handling fully laden super cape size vessels of up to 200,000 DWT.
Currently, GPL operates 9 berths and has freehold land of ~1,800 acres. With a master plan capacity of 250 MMTPA with 31 berths, GPL has sufficient headroom to support future growth.
GPL will benefit from APSEZ’s pan-India footprint, logistics integration, a customer-centric philosophy, operational efficiencies and strong balance sheet to deliver a combination of high growth by enhancing market share and add additional cargo types and improved margins and returns.
KARAN ADANI
CEO & Whole Time Director, APSEZ
“The acquisition of GPL is a further augmentation of our vision of capitalizing on an expanded logistics network effect that generates greater value as it expands. Every additional node that we are able to add to our network allows us to deliver a greater level of integrated and enhanced solutions to our customers. In this context, GPL is a tremendous addition to our portfolio. The associated hinterland we will now be able to tap into is one of the fastest-growing in the eastern region and with the logistic synergies APSEZ brings to the table, GPL has the potential to become a 250 MMT port. This will undoubtedly help accelerate the industrialization of AP. The Raju family has built a great port and we will continue to expand the world-class asset that has been initiated by them.”
-Mr Karan Adani, CEO and Whole Time Director of APSEZ [Press release APSEZ]
We assisted GPL and the GPL Promoters in drafting, reviewing, negotiating and finalising the transaction documents.
ABOUT THE LEGAL TEAM
MEHUL SHAH
Partner, Khaitan & Co. | Corporate and Commercial, Corporate Restructuring, Restructuring & Insolvency
The deal was led by Partners Mehul Shah and Ashraya Rao with assistance from Principal Associate Aayush Misra. Mehul Shah is a Partner in the Corporate and Commercial Practice Group in the Mumbai office. He specialises in M&A, corporate restructuring including court-approved mergers and amalgamations, insolvency restructuring, private equity, joint ventures and collaborations.
The transaction is subject to approvals under applicable laws, including approval of the Government of Andhra Pradesh and the Competition Commission of India.
About Khaitan & Co
Established in 1911, Khaitan & Co is a leading full-service law firm in India with over 750 fee earners and 165 partners. Khaitan & Co is routinely recognised as a top tier law firm across its practices by all notable publications.
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