Dighi port buy: Did Adani bite off more than it can chew?

Unlike its other port acquisitions, turning around Dighi port will pose the stiffest challenge yet to Adani Ports and Special Economic Zone Ltd (APSEZ). The company last week won approval from the Mumbai Bench of the National Company Law Tribunal (NCLT) to acquire the debt-laden port for ₹650 crore.

APSEZ’s resolution plan includes a settlement of unpaid dues of ₹11.38 crore to the Maharashtra Maritime Board, the agency tasked with developing and regulating ports in the western State.

With the acquisition of Dighi port, APSEZ has expanded its presence to eight of the nine Indian coastal States. The only coastal State where it does not have a presence is West Bengal.

The NLCT approved the resolution plan for Dighi, submitted by APSEZ, India’s biggest private port operating firm, on March 5. APSEZ will pay ₹650 crore upfront to a consortium of 16 banks led by Bank of India, a 78.7 per cent haircut to the ₹3,056.96 crore that Dighi port owes these financial creditors, making it one of the cheapest deals in the ports sector.

Did APSEZ over-pay?

Yet, there is a view among port industry experts that APSEZ has paid at least ₹200 crore more for Dighi port at a time when the coronavirus outbreak is tripping global trade with no signs of easing up, and with the potential to hit cargo volumes.

The liquidation value set by the valuers for Dighi port was ₹356.30 crore.

the hindu businessline
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