Port of Singapore picks up 49% in ABG terminal

Source: The Economic Times

MUMBAI: Port of Singapore Authority (PSA), one of the world’s largest port operators, has bought 49% in ABG Infralogistics’ subsidiary — ABG Kolkata Container Terminal. The port giant has also subscribed to preference shares in another wholly-owned subsidiary of ABG — ABG Kandla Container Terminal.

On October 3, 2007, ET had first reported about ABG’s plans to sell stake in its two subsidiaries. Two foreign shipping lines — Zim of Israel and Geneva-based Mediterranean Shipping Company (MSC), world’s second largest container line — were in race to buy the stake in the two subsidiaries. However, PSA, which already holds 12% in ABG Infralogistics, pipped the two shipping lines to strike the deal.

IDFC SSKI is believed to have advised ABG on the deal. ABG Infralogistics managing director Saket Agarwal refused to give any financial details. Sources however told ET that PSA paid around Rs 150 crore for the 49% stake in the Kolkata subsidiary. PSA is likely to pick up stake in Kandla terminal at a later stage.

ABG Infralogistics, formerly ABG Heavy Industries, on Tuesday informed BSE that its board met on February 5, and has entered into an agreement with PSA India for the two subsidiaries. The funds will be used for ABG’s expansion projects.

“We are in a capital-intensive sector, and need capital to grow. We are looking at bringing in investors. But our talks are at a very preliminary stage,” Mr Agarwal had told ET earlier. He, along with his younger brother Rishi Agarwal, holds around 60% of ABG Infralogistics.

On Tuesday, ABG Infralogistics stock moved up 5% to close at Rs 608 on BSE. It had touched a 52-week high of Rs 850 on January 3, 2008.

The company’s proposed capital expansion plans include Rs 300-crore investment in its crane manufacturing capacity, and up to Rs 2,000-crore investment in the port sector.

It currently operates the Kolkata container terminal under a unique own-operate-maintain (OOM) contract since April 2005, and has handled 1,70,000 containers (20 ft equivalent container units or TEUs) during the last financial year (2006-07). It hopes to handle over 2,00,000 TEUs during the current financial year.

It started Kandla operations in April 2007, and hopes to handle around 2,20,000 TEUs in the current fiscal, 25% growth from last financial year, when Kandla Port Trust operated the terminal.