Adani Ports Place Initial Bid To Buy Debt Laden Karaikal Port In Pondicherry

Adani Ports and Special Economic Zone Ltd (APSEZ) has placed an initial bid to buy stressed port company Karaikal Port Pvt Ltd.

Expression of interest (EoI) has been submitted by many companies like Vedanta, Adani Ports and Special Economic Zone, JSW Infrastructure, Jindal Power, and a partnership between RKG Fund and Sagacious Capital to participate in the upcoming auction of Karaikal Port, which is subject to insolvency proceedings before the National Company Law Tribunal (NCLT).

Karaikal Port was admitted for bankruptcy proceedings by the NCLT's Chennai bench on April 29 of this year in response to a plea made by one of its financial creditors, Omkara Asset Reconstruction Company.

The company was unable to pay back its debt of Rs 2,960 crores.

The NCLT subsequently selected Rajesh Sheth as the company's resolution specialist.

On a 30-year concession granted by the Puducherry government, Karaikal Port Pvt Ltd operates the all-weather Karaikal port built on a Construct, Function and Switch (BOT) model. Operations at the port started in June 2009.

If Karaikal is acquired, APSEZ's foothold on the Eastern coast, where it recently acquired Krishnapatnam and Gangavaram ports, will grow. Additionally, ports and terminals are operated by APSEZ in Dhamra, Kattupalli, and Ennore.

APSEZ operates ports/terminals on the western coast at Mundra, Tuna, Dahej, Hazira, Dighi, and Mormugao.

A combined 538 million tonnes (mt) of cargo can be handled annually by the 12 ports/terminals that APSEZ operates on the east and west coastlines.

In the agency's annual report for FY22, Karan Adani, CEO APSEZ, claimed, "In three years, we expect to develop our cargo volumes by 60 percent to 500 mt as we goal to emerge as the world's largest port operator and India's largest transport utility by 2030." reports The Economic Times.

If profitable within the bid, Karaikal Port may be APSEZ's second port acquisition underneath IBC after Dighi port in Maharashtra.