Adani Ports acquires 100% stake in Ocean Sparkle

Representative image

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Adani Ports and Special Economic Zone Ltd (APSEZ), through its subsidiary, The Adani Harbour Services Ltd, has entered into a definitive agreement for acquisition of 100 percent stake in Ocean Sparkle Limited (OSL), India's largest third-party marine services provider, for a consideration of Rs 1,530 crore.

Indian Billionaire Gautam Adani-led company will pay Rs 1,135.30 crore for direct acquisition of 75.69 percent stake in OSL, along with Rs 394.87 crore for indirect acquisition of 24.31 percent stake, the company said in a stock exchange filing on April 22. The transaction is expected to be completed within one month.

“OSL is valued at an enterprise value of INR 1,700 Cr with INR 300 Cr of free cash in the company. The company was established in 1995 by a group of marine technocrats with Mr. P Jairaj Kumar as the Chairman and MD, who will continue as the Chairman of the OSL board,” Adani Group company said in the filing.

Also Read | Gautam Adani starts 2022 like 2021 – making more money than any other Indian

OSL has an asset base of 94 owned vessels and 13 third-party owned vessels. Key activities carried by the company include towage, pilotage, and dredging. “OSL has long-standing relationships with its existing clients, with contracts ranging from 5 to 20 years (average length of contracts is ~7 years). The Company has presence in all the major ports, 15 minor ports and all the 3 LNG terminals in India,” the statement said, adding that OSL has significant experience in global maritime servicing through its operations in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen and Africa.

Also Read | Indian ports fast-track efforts to increase cargo handling capacity

“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 Mr 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.”

Also Read | Adani Group becomes third Indian conglomerate to cross $200 billion Mcap

ICRA has given AA- credit rating to OSL. Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. “The Company is expected to have revenue of INR ~600 Cr, EBITDA of INR ~310 Cr and PAT of INR ~135 Cr in FY22. Around 92 percent of OSL’s total revenue was contributed by marine services (Towage & Pilotage), and the remaining 8 percent is from dredging and other offshore services combined. The net debt to EBITDA ratio is less than 1x,” according to ICRA.