Ascent Capital, a Bangalore-based private equity fund, is investing Rs200 crore in Karaikal Port Pvt Ltd, a company belonging to the diversified Marg Group.
KPPL has entered into a definitive agreement with Ascent Capital Advisors Pvt Ltd for investment of up to Rs200 crore to fund the development of Karaikal Port.
As per the terms of the agreement, Ascent will invest the amount in two tranches by way of secondary purchase of promoter equity shares amounting to Rs150 crore and by way of primary infusion of capital amounting to Rs50 crore by subscribing to Karaikal Port's cumulative convertible preference shares.
Ascent has completed the first tranche of investment by purchasing Rs125 crore worth of equity shares of KPPL from Marg Limited and by investing Rs32 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.
As of March 31, 2011, Marg Ltd held 95 per cent stake in Karaikal Port, the company said in a statement.
The deal values the Karaikal Port project at Rs1,330 crore on a pre-money basis, which means Ascent has acquired 11.2 per cent stake that will increase to around 14.5 per cent when the CCPS will be converted into equity shares.
Karaikal port is a deep-water port located on the east coast of India in Karaikal district in the union territory of Pudicherry, about 320 km from Chennai Port. The port, when fully developed, will have nine berths capable of handling up to 47 million tonnes per annum (MTPA) of cargo.
The port is to be developed in three phases with the final phase getting operational by 2016. Phase I of the Karaikal Port development, which is currently operational, comprises two berths - one each for coal and general cargo. Phase II currently under implementation, involves a capex of Rs1,570 crore. Phase 2A will be operational by October this year and will take the capacity of the port to 21 MTPA.