Bangalore headquartered Ascent Capital, a leading private equity firm has decided to invest Rs 200 crores in the MARG Karaikal Port. The funds will be used for the MARG Karaikal Port Phase 2A expansion plans which will enhance the port’s capacity from the already planned expansion of 21 MMTPA to 28 MMTPA and involves an additional capex of Rs. 600 crores.
KPPL had entered into definitive agreements with Ascent for an investment of up to Rs. 200 crores to fund the development of the Karaikal port. As per the terms of the definitive agreements, Ascent would invest Rs. 200 crores into KPPL by way of secondary purchase of promoter equity shares amounting to Rs. 150 crores and by way of primary infusion of capital amounting to Rs. 50 crore by subscribing to Compulsorily Convertible Preference Shares (“CCPS”). The deal values KPPL at Rs. 1,330 crores on a pre-money basis.
Commenting on the investment, GRK Reddy, Chairman and Managing Director, MARG Limited said, “MARG Karaikal Port is fast emerging as one of the finest ports in the South East Coast of India. The investment from Ascent Capital into MARG Karaikal Port comes in at an opportune time and more importantly is a testimony to the sturdy fundamentals of the port led by a high efficiency quotient and a strategic location that supports an ever increasing hinterland.”
Ascent has completed the first tranche of its investment by purchasing Rs. 125 crore worth of equity shares of KPPL from MARG Limited and by investing an amount of Rs. 32 crore by subscribing to CCPS of KPPL. Karaikal Port had already attracted a private equity investment by India Infrastructure Fund into KPPL during March 2010 that with the present investment by Ascent, the port has two institutional investors adding value by their infrastructure exposure and expertise to augment and fuel the ambitious growth plans of the Karaikal Port.
Speaking earlier about the investment, K E C Raja Kumar, Founder & CEO, Ascent said, “MARG Karaikal Port is a promising asset. We see tremendous value in the port side of infrastructure.”