Ports and shipping in India

RISING SUN

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Dec 3, 2017
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Adani acquires India's largest marine services company Ocean Sparkle​

Adani group has acquired India's largest marine services company, Ocean Sparkle Ltd. Adani Ports and Special Economic Zone Ltd (APSEZ) through its subsidiary, the Adani Harbour Services Ltd, has entered into a definitive agreement for the acquisition of a 100 per cent stake in Ocean Sparkle Ltd.

Ocean Sparkle Ltd (OSL) ranks first in India and 11th globally in providing end-to-end marine services.

"Given the synergies of OSL and Adani Harbour Services, the consolidated business is likely to double in five years with improved margins, thereby creating significant value for APSEZ’s shareholders," said Karan Adani, CEO and whole-time Director, APSEZ.

"This acquisition not only provides APSEZ a significant share of India’s marine services market but also provides us a platform for building presence in other countries, thereby facilitating APSEZ’s journey towards becoming the largest port operator globally by 2030 and largest integrated transport utility in India," Adani said.

ADANI-OCEAN SPARKLE DEAL

  • Key activities carried out by the company include towage, pilotage, and dredging. With an asset base of 94 owned vessels and 13 third-party owned vessels, OSL is a market leader.
  • OSL is valued at an enterprise value of Rs 1,700 crore with Rs 300 crore of free cash in the company.
  • The company was established in 1995 by a group of marine technocrats with P Jairaj Kumar as the Chairman and MD, who will continue as the Chairman of the OSL board.
  • OSL has long-standing relationships with its existing clients, with contracts ranging from 5 to 20 years (average length of contracts is ~7 years).
  • Further, the contracts are on Take or Pay (TOPA) basis, thereby providing robustness to OSL’s business model. The Company has a presence in all the major ports, 15 minor ports and all the 3 LNG terminals in India.

  • Over the years, OSL has built and deployed a team of 1,800 personnel across India. The Company has significant experience in global maritime servicing through its operations in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen and Africa.

OCEAN SPARKLE

OSL’s attractive capital structure, quality operations and sustainable cash flows are reflected in its attractive credit rating (AA- by ICRA).

The Company is expected to have revenue of Rs ~600 crore, EBITDA of Rs 310 crore and PAT of Rs 135 crore in FY22. Around 92 per cent of OSL’s total revenue was contributed by marine services (Towage & Pilotage), and the remaining 8 per cent is from dredging and other offshore services combined.

On the back of operational and financial synergies, the consolidated revenue and EBITDA of Adani Harbour Services is expected to jump ~100 per cent and reach around Rs 5,000 crore and Rs 4,000 crore respectively by FY27.
 

RISING SUN

Senior member
Dec 3, 2017
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6,047

Shipping Corporation of India: Govt to invite financial bids for sale by September​

Privatisation of SCI is likely to be completed in the current fiscal.​

The government is likely to invite financial bids for Shipping Corporation of India by September after the process of demerger of non-core assets is completed, an official said.

As part of the strategic-sale process, the government is hiving off Shipping House and the training institute and some other non-core assets of Shipping Corporation of India (SCI).

"The process of the demerger is time-consuming. We would be ready to invite financial bids in 3-4 months," the official said. The board of Shipping Corp met last week and approved an updated demerger scheme for hiving off the non-core assets of SCI to Shipping Corporation of India Land and Assets Ltd (SCILAL) including Shipping House, Mumbai and MTI (Maritime Training Institute), Powai to complete the process of de-merging all the non-core assets to the new company SCILAL.

As per the balance sheet of SCI, the value of non-core assets held for demerger as of March 31, 2022, stood at ₹2,392 crore.

The SCI board in August last year, had approved a demerger scheme for hiving off the identified non-core assets and incorporated SCILAL in November 2021, for holding such assets of the company, which is under the Ministry of Ports Shipping and Waterways. The Ministry in April 2022, had directed SCI to expedite the process of demerger of non-core assets of SCI to SCILAL and also requested the Board of SCI to review the demerger scheme for hiving off the non-core assets, including Shipping House, Mumbai and MTI, Powai.

"Such modifications do not have any impact on carrying value of non-core assets in the financial statements. The implementation of the Scheme including the modified scheme is in process and considering the reiteration by MoPSW and DIPAM to expedite the demerger process, there is a certainty of completion of the process in the near future," as per the SCI independent auditor's report presented to the Board.

In March last year the government had received multiple bids for privatisation of Shipping Corporation of India.

The Department of Investment and Public Asset Management (DIPAM) in December 2020, had invited expressions of interest (EoI) for strategic disinvestment of its entire stake of 63.75 per cent in Shipping Corp of India, along with the transfer of management.

The Cabinet in November 2020, had given in-principle approval for the strategic divestment of Shipping Corp. The privatisation of SCI is likely to be completed in the current fiscal. The government has budgeted to garner ₹65,000 crore from CPSE disinvestment in the ongoing 2022-23 fiscal.

While the government has already raised ₹3,000 crore from a minority share sale in ONGC, another ₹21,000 crore would come in from the ongoing IPO of Life Insurance Corporation this month and ₹211.14 crore after the handover of Pawan Hans management control to Star9 Mobility Pvt Ltd, a consortium of Big Charter Pvt Ltd, Maharaja Aviation Pvt Ltd and Almas Global Opportunity Fund SPC, by June.