Global private equity giant Warburg Pincus LLC will invest £ 800 million for a 0.49 percent stake in Adani Ports and Special Economic Zone Ltd (APSEZ) to join the list of marquee investors in India’s largest private port operator.
The US-based PE company is expected to invest more in APSEZ or its units.
APSEZ will issue up to 1,00,00,000 shares at a price of £ 800 per share in Windy Lakeside Investment Ltd, a unit of Warburg Pincus, for a total of up to £ 800, APSEZ said in a statement.
The preferential issue was approved by the board of APSEZ on Sunday. Windy Exit On March 3, APSEZ announced that it would acquire Windy Lakeside Investment’s 31.5 percent stake in Gangavaram Port Limited (GPL) for £ 1,954 billion. The deal helped Windy end its 12-year investment in Gangavaram.
Of the total consideration, Windy 800 crore will be paid to APSEZ as part of a preferential issue of shares, sources said. “With the strong performance of APSEZ shares, it is better to pay Windy in shares than in cash,” said one banker.
APSEZ shares closed Friday at £ 732 per share on the Bombay Stock Exchange and £ 749.65 per share on the National Stock Exchange.
APSEZ has not disclosed how it intends to pay the balance of the Gangavaram deal to Windy (Warburg Pincus), but sources have indicated that a similar preferential issuance agreement may be drawn up in some other units of APSEZ in lieu of cash. Additionally, the PE company could expect greater exposure to the broader Adani conglomerate.
Karan Adani, CEO and Whole Time Director of APSEZ, hinted at this when he tweeted from his official handle: “We look forward to building on this relationship. This investment, he added, “further reaffirms the foundations and alignment of APSEZ’s environmental, social and governance (ESG) plans to global standards. “
The company aims to handle 500 million tons of freight and become climate neutral by 2025.
The ESG has grown in importance for the Adani Group as the APSEZ increasingly relies on dollar bonds for its financing needs.
More globally significant financial institutions (GSFI) explicitly exclude thermal coal exposures while incorporating climate risk into bond issues.
APSEZ’s integrated infrastructure business model combines a series of 12 ports on the east and west coasts, industrial zones and a multimodal logistics presence across India that is increasingly served by renewable energies.
“APSEZ plans to position itself as the world’s largest port and logistics platform over the next ten years,” said a company employee.