Gujarat Pipavav Port to invest Rs 1,097 cr on capacity expansion

Introduction

Gujarat Pipavav Port Ltd (GPPL) on Monday said it plans to invest Rs 1,097 crore on expansion of Pipavav Port in Gujarat and has also concluded a capital-raising exercise of Rs 350 crore through Qualified Institutional Placement (QIP) and a preferential issue to its promoter, mainly to prepay the existing loan.

The company is proposing an expansion of the infrastructure facilities at APM Terminals at Pipavav in Gujarat to increase capacity and enhance operational efficiencies. "We propose to increase capacity for container cargo to about 1.5 million TEUs and the capacity for bulk cargo to 10 million tonnes," said Mr Prakash Tulsiani, Managing Director.

The proposed expansion plans for container cargo include a new container berth of 348 meters to provide a contiguous berth of 735 meters to enable the port to simultaneously handle two post-Panamax vessels, dredging in berth pockets, three new post-Panamax cranes, increasing the yard capacity to 1.5 million TEUs and 10 new Rubber Tyred Gantry Cranes, besides internal roads.

For bulk cargo the plans include construction of a new container berth to enable the port to dedicate the existing multi-purpose berth exclusively for bulk cargo services, additional berth extension by 110 meters to provide a contiguous berth of 800 meters, dredging, new Gottwald crane, and a dedicated conveyor system for coal.

These proposed expansion activities for bulk cargo services will be undertaken based on customer requirements by entering into commercial arrangements with the customers.

The QIP was of 3.41 crore shares at a price of Rs 58.45 per share aggregating Rs 199.48 crore to institutional investors. The preferential issue was of 2.58 crore shares to the company's promoter, APM Terminals Mauritius Ltd, at a price of Rs 58.45 per share, aggregating to Rs 150.52 crore. The promoter's shareholding in the company has been maintained at 43.01 per cent post the QIP and the preferential issuance.

Kotak Mahindra Capital Company Ltd and IDFC Capital Ltd acted as the book-running lead managers for the company's first QIP, said Mr Hariharan Iyer, CFO, GPPL/APM Terminals Pipavav.

Those allotted shares included institutions such as Bajaj Life Insurance, SBI Life Insurance, Franklin Templeton, Kotak Mahindra, Vanguard International Explorer Fund, Schroder Asia Pacific Fund PLC and Jardine Fleming.

The funds raised will be largely used to prepay the existing loan in order to strengthen the company's balance sheet and to facilitate funding options for its expansion plans.

Gujarat Pipavav Port Ltd is the developer and operator of APM Terminals Pipavav located in Gujarat. The promoters, APM Terminals, bought a majority stake in the company in 2005, and the port began marketing its services to clients based in North-West India. In 2010, the company launched its IPO and improved cargo volumes, the number of clients, road and rail connectivity and storage facilities. The port is part of an international network of ports and terminals belonging to APM Terminals, which is part of the AP Moller-Maersk group.

Source

India Brand Equity Foundation, July 17, 2012