The Shapoorji Pallonji Group announced the sale of its Brownfield Gopalpur Port to Adani Ports and SEZ for an enterprise value of Rs 33.5 billion.
This is the second port divestment in the last few months from the diversified construction and infrastructure, real estate and energy conglomerate. It had earlier divested its Dharamtar Port to JSW Infrastructure Limited for an enterprise value of INR 7.1 billion. With these asset sales, the SP Group continues its deleveraging journey with planned asset monetisation to marquee counterparts.
The Shapoorji Pallonji Group had acquired Dharamtar Port (in Maharashtra) in 2015 and has successfully turned around port operations. From less than 1 MTPA when Shapoorji Pallonji took over, Dharamtar Port is expected to handle 5 MTPA in FY24.
The under-construction Gopalpur Port, located in Odisha, was acquired in 2017, with significant issues hampering its development. Post acquisition, the Shapoorji Pallonji Group commenced port operations by building the port infrastructure and stabilising industrial relations. Currently, the port operates at high levels of efficiency, capable of handling 20 MTPA. Further, it recently signed up with Petronet LNG to set up a Greenfield LNG regasification terminal, adding predictable long term cash flows for the Port.
A Shapoorji Pallonji group spokesperson said “The planned divestments of Gopalpur and Dharamtar Ports, at a significant enterprise value, demonstrate the group’s ability to turn around assets and create stakeholder value in a relatively short period of time, capitalising our core strengths in project development and construction. These divestments are key milestones in our roadmap to reduce group debt and set the stage for growth, taking advantage of the macro trends for demand in our core businesses, both in India and overseas”.
The Shapoorji Pallonji Group was advised, on this deal, by Deutsche Bank.