German firm mulls buyout of Dighi Port

Debt-laden port could get into insolvency list, but promoters say talks are on with investors

A German port company is examining the case for buying debt-laden Dighi Port, at a time when the latter could be taken before the National Company Law Tribunal (NCLT) for unpaid loans.

“Due diligence has just started and will take till at least December-end for the process to get over. But, with lenders and creditors losing patience, there is a strong possibility of Dighi entering the NCLT list,” a source told Business Standard. He did not divulge the German company’s name.

Dighi is in Raigad district of Maharashtra, about 170 km from Mumbai by road. The port is being developed by Balaji Infra Projects, under a 50-year concession agreement from the state’s maritime board.

However, when asked, Vijay Kalantri, chairman and managing director of Dighi Port Ltd, ruled out the possibility of Dighi getting into the NCLT list. 

“Our debt is not so high that we need to be taken to the NCLT. More, Dighi’s valuation is double the debt, at about Rs 3,000 crore. So, I do not see Dighi going through the NCLT process,” he said. 

Kalantri also said there was no due-diligence from anyone at the moment. “There are a few strategic investors with whom I am having a private discussion and all these are foreign port companies,” he added.

Balaji Infra has 51.01 per cent in the port company. Infrastructure Leasing & Financial Services (IL&FS) has 39.37 per cent. The balance 5.46 per cent is with Tara India Fund III, a special purpose vehicle. Dighi got a ‘default’ category rank from CARE Ratings this April. It has seen only two million tonnes of capacity being utilised, of the 30 mt installed. 

Debt is nearly Rs 1,600 crore and the Bank of India is the lead lender. IL&FS, besides holding a stake in the port entity, is also one of the lenders. Balaji Infra is owned by Kalantri. 

“Any non-performing asset can be taken to NCLT by the lenders. But, in the current scenario, it is difficult to get a buyer through this route, since cargo is also not picking up,” said Hitesh Avchat, an analyst with CARE Ratings. “It makes more sense to pressurise the current promoter to bring the asset on track.”

The port has land of 1,600 acres and an oil tank farm facility. Dabhol apart, it is the only port in Maharashtra with all permissions in place for setting up a Liquefied Natural Gas Terminal. Part of the Delhi-Mumbai Industrial Corridor and National Investment & Manufacturing Zone, it is considered an attractive investment opportunity.

“Delayed road connectivity has kept utilisation low at Dighi,” said Kalantri. “It’s been seven years that we have been waiting for this; it has now started to get on track. So, we hope for better utilisation in the coming years.”

Steel coil, cement, fertiliser, bauxite and coal are part of the cargo handled at Dighi. There is potential for hinterland connectivity with the automobiles, chemical, sugar and food processing industries nearby.