Karaikal Port: Adani And Vedanta Group In Final Race To Acquire Debt-laden Port Under NCLAT Insolvency Proceedings

Adani Ports and Special Economic Zone (APSEZ) and an entity owned by Vedanta group are in the final race to acquire Karaikal Port, ET Infra reported quoting sources briefed on the matter.

September 30 (Friday) was the last date for submission of binding financial bids for the port. The two final bids will be opened at a committee of creditors meeting on Monday. 

The two companies were amongst five players that had submitted expressions of interest for the 600-acre port in August. JSW Infrastructure, Jindal Power, and a partnership between RKG Fund and Sagacious Capital also submitted initial bids.

Karaikal port is being auctioned as part of the 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.

A group of eleven lenders all of which are public sector banks or financial institutions had originally sanctioned a loan of ₹1,362 crore to Karaikal Port. MARG Limited (the port developer) was unable to pay back its debt of Rs 2,960 crores. Nine of the eleven lenders sold their loans to Edelweiss Asset Reconstruction Co .

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 under a public private partnership arrangement between the government of Puducherry and MARG, a Chennai-headquartered infrastructure developer promoted by former merchant banker GRK Reddy. MARG Limited had incorporated a special purpose vehicle to develop the port.

Operations at the port started in June 2009. It has handled diverse cargo such as coal, sugar, cement, fertilisers, project cargo, agro commodities, liquid cargo and containers.

The Port is a located near Keezha Vanjore Village in Karaikal with a sizable primary hinterland. It is the only all weather, deep water, multi- commodity port between the Chennai port & Tuticorin ports on this 680 km coastline and is served by 4 national highways and rail connectivity through 6 private railway sidings.

If Karaikal acquisition is successful for APSEZ, the leading port player's foothold on the Eastern coast, where it recently acquired Krishnapatnam and Gangavaram ports, will expand further 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.