Mumbai: Adani Ports on Saturday announced that it will evaluate the Tamil Nadu-based Kattupalli port’s operations for a period of one month.
Adani Ports which is a part of Adani Ports and Special Economic Zone (APSEZ) informed the Bombay Stock Exchange (BSE) that it has entered into a non-binding memorandum of understanding (MoU) with L&T Shipbuilding for evaluating the operations of Kattupalli port effective from October 2015 for a period of one month.
“The definitive agreements would be entered into later. All non-operating revenues and expenses will be to L&T’s account,” the company said in a regulatory filing to the BSE.
“Adani shall be responsible for EBIDTA (earnings before interest, taxes, depreciation and amortisation) gains and losses arising from the port operation for this period, the shipyard will continue to be managed and operated by L&T.”
The MoU assumes significance as APSEZ is trying to build its capacity in the eastern shoreline and L&T which is a majority stakeholder in the port is trying to divest its assets in non-core areas.
The MoU makes Adani’s interest in the Kattupalli port more clear as evaluation of operations is generally accompanied by the sale of the asset at a later date. APSEZ had earlier acquired Dhamra Port in Odisha from Tata Steel and L&T for around Rs.5,500 crore.
The company has also bagged an order worth over Rs.4,000 crore to develop the Vizhinjam International Deepwater Multipurpose Seaport Project in Kerala under pubic-private partnership (PPP) mode on a design-build-finance-operate and transfer basis.
APSEZ had a total cargo throughput of 127 million metric tonne (MMT) in 2013-14 and is poised to exceed 200 MMT of cargo by 2020. Currently, the company operates eight ports in India namely Mundra port, Hazira port, Dahej port, Murmugao port, Vizag coal terminal, Kandla bulk terminal, Dhamra port and Ennore port. In August, the company had posted an increase of 13 percent in its net profit at Rs. 641 crore for the first quarter as against Rs.568 crore in the same period last fiscal.