KPCL eyes fresh in­vest­ments to fuel ex­pan­sion plans

The Financial Express - - COMPANIES -

Kr­ish­na­p­at­nam port, promoted by the Hy­der­abad-based CVR Navayuga group, is a pri­vately-built and owned, all weather, deep wa­ter port lo­cated in Nel­lore dis­trict of Andhra Pradesh. Kr­ish­na­p­at­nam Port Com­pany Ltd (KPCL) had achieved a cargo through­put of 40 mil­lion tonne in 2014-15 and hopes to sta­bilise this growth dur­ing this year with about 55 mil­lion tonne in 2016-17. Talk­ing to BV Ma­ha­lak­shmi about the port’s ex­pan­sion plans, Chinta Sasid­har, MD, says that the group is in the process of set­ting up an in­dus­trial hub in Nel­lore dis­trict which is es­ti­mated to cost about R10,000 crore to R11,000 crore. The hub will house power plants and re­finer­ies among other units. Ex­cerpts: What has been the in­vest­ment into the port in the last seven years? Would there be a stake sale or bring in fresh in­vestors on board? CVR Navayuga Group along with fam­ily and friends own 91% of Kr­ish­na­p­at­nam Port and the bal­ance 9.4% is held by the Lon­don-based eq­uity firm 3i Group Plc. The to­tal amount in­vested into the devel­op­ment of the port is in ex­cess of R8,000 crore. While the com­pany's debt eq­uity ra­tio is about 3:1, we had to­tal bor­row­ings of R6,000 crore and net worth of R2,000 crore. 3i Group en­tered into the com­pany in 2009 and has 9.4% stake in the com­pany amount­ing to R803.5 crore and is look­ing to exit from the com­pany. How­ever, there are some is­sues be­tween KPCL and 3i and the mat­ter is still pend­ing in courts. We are look­ing to raise fresh funds to part-finance our ex­pan­sion plans which may re­quire overR8,000 crore. This could be a mix of eq­uity or eq­uity-linked in­stru­ments. A few Ja­panese in­vestors have shown in­ter­est. How are you work­ing on your pro­posed plan to set up an in­dus­trial smart city? We are plan­ning to de­velop an in­dus­trial smart city ad­ja­cent to the port. We are plan­ning for an SPV along with the state gover nment and the Ja­pan In­ter na­tional Co­op­er­a­tion Agency (JICA) for de­vel­op­ing this hub across 6,000 acres. This would be cargo-based in­dus­try hub. This will re­quire about R10,000 crore- R11,000 crore and may start in a phased man­ner soon. Could you elab­o­rate about the MoU signed with Pet­ro­gas and AP gov­ern­ment for an LNG ter­mi­nal? We signed an MoU with Pet­ro­gas and the gov­ern­ment of AP for set­ting up a liq­ue­fied nat­u­ral gas ter­mi­nal. Pet­ro­gas Pvt Ltd, a JV com­pany be­tween Iso­meric Hold­ings Bhd from Malaysia and Vi­jayawada-based LEPL Ven­tures Pvt Ltd (LEPL), signed for set­ting up a re­gasi­fi­ca­tion and float­ing stor­age ter­mi­nal (FST) at Kr­ish­na­p­at­nam port with an in­vest­ment of over $500 mil­lion.

Pet­ro­gas will con­struct five mil­lion tonne per an­num (MTPA) ca­pac­ity re­gasi­fi­ca­tion and stor­age plant and re­lated an­cil­lary fa­cil­i­ties like float­ing LNG stor­age tanks, re­gasi­fi­ca­tion unit, etc. in phase-I, which is ex­pected to cost $500 mil­lion. What are your fu­ture plans and the na­ture of in­vest­ments for your ex­pan­sion plans? Our fu­ture in­vest­ments would re­quire about R8,000 crore over a phased man­ner. This would be for ad­di­tion of more berths. We have plans to have about 42 berths with over 200 MTPA ca­pac­ity. Be­sides, we are also eye­ing ded­i­cated con­tainer ter mi­nal in 600 acres, hub port for coal, agri and other com­modi­ties and also a bunker­ing fa­cil­ity.

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