Ennore Port to raise Rs 400 cr via pvt placement

Ennore Port Ltd (EPL), the country's first corporate port owned by the Centre, is planning to raise around Rs 400 crore through private placement of shares to part finance expansions.

The port administration has said it may also look at initial public offering (IPO). The proposed fund-raising is to support infrastructure creation, which in turn is expected to bring in Rs 6,500 crore, according to shipping minister, GK Vasan.

Speaking to Business Standard on the sidelines of the memorandum of understanding (MoU) signing ceremony, Vasan said “we have to look at all options to raise money.”

The MoU was signed between EPL and Bay of Bengal Gateway, a special purpose vehicle formed to set up a Rs 1,407-crore container terminal at the port.

Earlier, the minister said 14 projects worth Rs 6,466 crore were lined up at the port. These include three dredging projects, seven terminal projects and four connectivity -- rail and road -- projects.

“Though a major portion of the investment will come from the private players, we have to invest in creating infrastructure like dredging and connectivity.”

Of the three dredging projects, one project worth Rs 92 crore is complete and two more projects worth Rs 640 crore have been lined up. The port is also creating infrastructure to handle cars for the export markets, with an investment of around Rs 110 crore.

S Velumani, chairman and managing director, EPL, said, “We are planning to raise Rs 300-400 crore and have recommended private placement route. If the market is good, we might consider an IPO also. The government has to take the final call.”

The port is located 30 km from Chennai port and was set up under the Companies Act, keeping it outside the scope of the Tariff Authority for Major Ports, the tariff regulator for 11 of the 12 ports owned by the government.

The Ennore port was set up primarily to handle cargoes such as iron ore and coal, and started operations nine years ago. It is set to become a multi-cargo port. “By 2013-14, the port should handle 75 million tonnes and by 2020-21, up to 90 million tonnes from the current 15 million tonnes,” said Vasan.