Ennore Port to raise Rs 1,000 cr via bond issue; plans container terminal

Current capacity at 30 mn tn, company plans addition of other 36 mn tn capacity over the next 2-3 years

Ennore Port has approached the public market to raise Rs 1,000 crore through a tax-free bond issue.

A Government of India company, Ennore Port, has opened a public issue of tax-free, secured, redeemable, non-convertible bonds to raise upto Rs 500 crore with an option to retain over subscription of upto Rs 500 crore.

The bonds will be issued for 10 and 15 years period with a coupon rate of 7.01% and 7.17%, respectively. Retail investors will get an additional 0.50% coupon. The Port said that the bonds will be listed on the Bombay Stock Exchange.

The issue opened on February 28 and will close on March 15, 2013.

MA Bhaskarachar, chairman cum managing director, Ennore Port said that the proceeds will go for the ongoing dredging expansion plans of the port. He said, “The Port is currently spending Rs 170 crore for the ongoing dredging work and will use the funds raised through this bond issue to continue the next phases of the expansion.”

The current capacity of the port is 30 million tonne and the company is adding another 36 million tonne capacity over the next 2-3 years taking its total capacity to 66 million tonne.

Ennore is primarily a coal-handling port but is now diversifying into other commodities, including an LNG terminal and a container terminal.

Bhaskarachar said, “The RFQ for the container terminal will be floated in FY13-14.”

As per the earlier plan, the port was to offer two container projects of 1000 metres each. However, it revised its plans and will now be developing three projects of 700 metres each.

The cost of the earlier plan was Rs 1400 crore. He said that there will be a cost escalation as the plans have been reworked. The port is currently assessing the quantum of this increase.

In total, 11 companies have shown interest in developing the container terminal. These include companies like L&T and APM Terminals among others, he said.