Ahmedabad: Adani Enterprises Ltd, the flagship company of the $8 billion Adani group that sold its realty business to promoter chairman Gautam Adani and his family last year, is now looking at doing the same to its Australian port business.
The company sold the realty business in the first quarter to the Adani family for about Rs.2,500 crore, including debt.
Adani Ports and Special Economic Zone Ltd (APSEZ), a unit of Adani Enterprises, currently owns entities controlling Abbot Point in Australia, which it bought last year for about $2 billion.
APSEZ said in a BSE filing that it has decided in-principle to sell its significant stake in entities controlling the Abbot Point Coal Terminal in Queensland, Australia, to the Adani family. This will be subject to requisite approvals, formalities and clearances, at a price determined by an independent valuer.
According to APSEZ, the move is aimed at focusing on the high-growth Indian ports and logistics sector and maintaining its leadership position in India.
“As the Australian business is attractive, the promoters want to keep it for themselves. It remains to be seen how the company does valuation of the Australian business. This is something that the company (APSEZ) has been silent about,” Mumbai-based stock analyst S.P. Tulsian said.
The proceeds from the funds will either be used for acquiring domestic port, including Dhamra port in Orissa, for which Adani is in the race or even to repay part of its existing debt.
APSEZ took on debt of $2 billion to fund the Australian port acquisition and has infused another $230 million for developing infrastructure at Abott Point in Queensland. APSEZ’s total debt is about Rs.11,000 crore.
“The existing debt of Abbot Point will be transferred to the Adani family. The equity portion is about $230 million and the proposed share transfer is expected to take place within three months time after an independent market valuation,” said an executive close to the development. “As per some taxation norms in Australia, APSEZ will have to stay invested with about $1,000 for some time. This will not have any impact on the equity transfer and the entire stake will be sold to the Adani family.”
An official spokesperson of Adani group declined to comment on the matter.
“The Dhamra port acquisition is likely to be finalized in a month’s time,” said a second official aware of the development.
APSEZ is in advanced talks to buy out the stakes of Larsen and Tourbo Ltd (L&T) and Tata Steel Ltd in Dhamra Port Co. Ltd for an enterprise valuation of about $1 billion, he said. L&T and Tata Steel couldn’t be immediately reached for comment.
As per APSEZ’s expansion plan, the existing coal terminal at Abbot Point that can currently handle 50 million tonnes per annum (mtpa) will be able to handle 120 mtpa over the next three years, Gautam Adani said in an interview in November.
The group wants to achieve 500 mt of cargo handling capacity by 2020 compared with its earlier projection of 200 mt.
APSEZ is in the process of getting environmental clearance for another coal terminal at Dudgeon Point, also in Queensland. Dudgeon Point can handle 90 mtpa and APSEZ aims to expand this to 200 mtpa.
Meanwhile, Adani Ports’ net profit rose 13% to Rs.361 crore in the quarter ended 31 December from Rs.321 crore in the year earlier. The company said that revenue grew 50% to Rs.1,390 crore from Rs.927 crore.