Marg to complete Phase II of Karaikal Port in 24 months

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Marg to complete Phase II of Karaikal Port in 24 months

GRK Reddy, Chairman and MD, Marg said would be implemented over a period of 24 months. MARG owns 100% of the equity in the Karaikal Port and Reddy stated that he would be looking at diluting the company’s stake in the project within the next 24 months.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Marg See previous management interviews See what other Experts & Brokerages are saying about Marg Marg BSE | NSE 25/05/12 Are Mutual Funds betting on Marg?

Construction company Marg Ltd's greenfield project at Karaikal formally went on stream and received its first vessel. Karaikal Port is an SPV floated for port projects. The first phase of the of the Karaikal port construction is nearing completion and the second phase which has an investment of about Rs 16000, GRK Reddy, Chairman and MD, Marg said would be implemented over a period of 24 months. MARG owns 100% of the equity in the Karaikal Port and Reddy stated that he would be looking at diluting the company's stake in the project within the next 24 months.

Here is a verbatim transcript of the exclusive interview with GRK Reddy on CNBC-TV18. Also watch the accompanying video.

Q: We understand you have received your first vessel at the Karaikal Port. Firstly, just about the financials, as we are given to understand your first phase is near completion. How much would the second phase really require in terms of funds and when would the revenues add on to your books?

A: As far as the first phase is concerned, the revenues are on. Primarily keeping the requirement of the customers over there in that area, we are increasing the draft to 13.5-14.5 metres. Apart from that, we are mechanizing the berths and adding three more berths in the second phase.

Q: In the second phase you have an investment for about Rs 1,600 crore. Debt-equity ratio is about 73:27. That translates into a debt of about Rs 300 crore. So, going forward, how are the interest costs going to pan out? In comparison, what is the revenue that you expect from this particular port?

A: The second phase will be implemented over a period of 24 months. As far as the second phase is concerned, we are now doing the dredging and adding three more berths. In terms of revenues, we have demand from our customers. It is a debt-equity of 27% equity and 73% debt. The existing bankers who are in the consortium of the first phase have shown interest. We have got a couple of sanction letters from them as well on this.

Q: In the 27% equity, who all are contributing to the equity portion? Is the entire stake with MARG?