Team News Riveting
Ahmedabad, January 30
Adani Ports and Special Economic Zone Ltd’s (APSEZ) composite scheme of arrangement (Scheme) to acquire Sarguja Rail Corridor Pvt Ltd (SRCPL) has been approved by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) and will be effective from the Appointed Date of 1 April 2021, subject to fulfilment of certain conditions precedent, as set out in the Scheme.
APSEZ will now consolidate all rail assets under a single business entity – Adani Tracks Management Services Pvt Ltd – creating considerable value for all stakeholders from day one, as it aligns with APSEZ’s vision of being a leader in the Transport Utility space.
This consolidation allows APSEZ, which is targeting 2000 km of track length by 2025, to participate in Indian Railways PPP projects without having to compete with similar businesses in the Adani portfolio, a position that is in full alignment with the equity interests of minority shareholders.
Karan Adani, CEO and Whole Time Director of APSEZ said, “As per the national rail plan 2020, Indian Railways will invest more than INR 3 Lakh Crore over the next 10 years to construct new rail lines. Further, the government’s shift in focus from road to rail as the preferred mode of transport, an obvious choice both economically and environmentally, will require significant participation of the private sector. Therefore, this acquisition creates significant business value for APSEZ as a Transport Utility.”
“The process adopted by APSEZ to acquire SRCPL from another entity within the Adani Group,” added Karan Adani, “reflects our continuous commitment to enhancing our corporate governance practices. The strongest endorsement of the process lies in the overwhelming support it received from our minority shareholders, reaffirming their confidence in APSEZ’s management.”
The acquisition being a related party transaction, APSEZ adopted a fully transparent approach with minority shareholders and creditors for approval. Some of the key steps in the approval process included:
• Proposal evaluation by an Executive Committee (EC) of three independent board directors
• Independent asset valuation (by Deutsche Bank and BDO Valuers) and ‘fairness opinion’ from JP Morgan and JM Financial on the valuation
• Post NOC from the stock exchanges, an application was filed for an NCLT-convened meeting of APSEZ’s equity shareholders and secured and unsecured creditors, to vote on the proposal
• Over 92 per cent of minority shareholders and close to 100 per cent of debtors voted in favour of the proposal
• NCLT, after reviewing the outcome, has approved the composite scheme Investment Case
• The acquisition of Surguja Rail will create value for all stakeholders from day one, as it is EPS accretive.
• Significant growth opportunity available as the business is yet to mature, including in non-Adani mine areas with annual potential of up to 40 MMTPA.
APSEZ, a part of the globally diversified Adani Group, has evolved from a port company to a Ports and Logistics Platform. It is the largest port developer and operator in India with 12 strategically located ports and terminals — Mundra, Dahej, Tuna and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Gangavaram, Visakhapatnam and Krishnapatnam in Andhra Pradesh, Dighi in Maharashtra and Kattupalli and Ennore in Chennai — representing 24 per cent of the country’s total port capacity, handling vast amounts of cargo from both coastal areas and the hinterland. The company is also developing a transshipment port at Vizhinjam, Kerala.
