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Lastin Infra to buy stake in Vizag Port’s terminal

Monday, 21 September 2015 | 16:00

Ammon Infrastructure Projects Ltd. (GIPL) has opted to divest its shareholding in Vizag Seaport Pvt. Ltd. (VSPL). GIPL, a majority shareholder with 73.8 per cent, has transferred 50 per cent stake to Lastin Infrastructure Projects Ltd.

VSPL is the first bulk cargo BOT (build–operate–transfer) terminal of Visakhapatnam Port Trust operating since 2004.

The transaction will be completed on receipt of statutory and regulatory approvals. Post-divestment, Lastin Infrastructure will hold 50 per cent and Lastin Holdings Ltd., the present foreign equity investor, will continue to hold 26.2 per cent.

GIPL will continue to hold the balance 23.8 per cent. Lastin Group comprising Lastin Infrastructure and Lastin Holdings (existing shareholder) will now have management control of VSPL.

Informed sources in the industry told The Hindu that it was not going to be an easy ride for the new investors given the continued struggle of the company to achieve the required draft of 14 meters despite spending almost Rs.40 crore so far. Getting this draft is crucial for the future viability of the company.

“Though the company has now been allotted 30 acres for development of storage area, away from habitation with less environmental issues, the allotment was delayed by nearly eight years,” VSPL CEO and whole-time Director Ragam Kishore. “Development would need substantial additional investment given the low-lying” nature of the land and soil conditions, Mr. Kishore said

Lastin Holdings is a leading player in Haldia and Paradip Ports and has vast experience in bulk cargo handling.

The company commenced operations in Visakhapatnam Port recently and the latest acquisition will help provide multi-port solutions to its pan India clientele.

The synergy of the promoters and their associates Precious Shipping, Bangkok, Ripley Stevedoring and Handling Services (P) Ltd. and International Seaports Haldia along with VSPL will enable world-class premium services for clients with delivery from pit head to plant for coal, gypsum and limestone, Mr. Kishore said.

The ongoing dredging of navigable waters is expected to be completed shortly and VPT is confident that vessels with arrival draft up to 14.5 meters can be berthed in the inner harbour to prevent diversion of cargo to Gangavaram Port, which has been happening for the past five years.

Tough task ahead

The going will not be smooth for VSPL given the intense competition from Gangavaram Port and other VPT and BOT berths. The company plans to augment its throughput by providing value added services of complete logistic solutions for cargo. With an intense competitive scenario emerging from the development of new berths and BOT berths, the new owners of VSPL have their hands full with just another 16 years of license period left. They face a big challenge of generating substantial business to make up for the past losses and ensure justifiable return on their investment.

The license period will end by November 2031 after which the facility will get transferred to Visakhapatnam Port.
Source: The Hindu

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