Timing couldn't have been any better. On the big day of Narendra Modi's win, Gautam Adani-owned Adani Ports and Special Economic Zone (APSEZ) sealed the long-pending deal to take over Dhamra Port on India's east coast in a Rs 5,500-crore takeover.
APSEZ on Friday said it executed a definitive agreement with two promoters of Dhamra Port Company Limited (DPCL) -- L&T Infrastructure Development Projects Limited & Tata Steel Limited to acquire 100% stake in the port company.
The deal was pending for more than a year for some regulatory approval. Being a private minor port, Dhamra Port is under the jurisdiction of the state government.
Gautam Adani, chairman of Adani Group, said in a statement, "The acquisition now gives us an opportunity to replicate the development and phenomenal growth of the Mundra Port on the eastern coast of India and thereby continue to execute on our pan India strategy."
Dhamra Port, which commenced operations in May 2011, handled a total cargo of 14.3 million tonnes in FY14. The port has two fully mechanised existing berths, 63 km of a private rail line connecting the Bhadrak station to the main trunk line and has already received environmental clearance for the development of 12 additional berths.
Following the acquisition, the second phase of development will be initiated within 90 days and completion targeted in 30 months. This continued expansion will allow the Dhamra Port exceed 100 million tonne of cargo capacity by the year 2020 and help APSEZ fulfill its vision of surpassing a 200 MT in total throughput well before 2020.
As per the agreement, the transaction is subject to customary conditions including lenders / third party approvals. Amarchand & Mangaldas and Suresh A Shroff & Co acted as legal advisors to APSEZ for the transaction.
What made Dhamra Port an interesting acquisition target is the combination of the naturally protected all-weather port, its deep draught with the ability to berth Capesize vessels, access to the massive potential in its hinterland, and proximity to the richest mineral wealth in the country.