JSPL bid to acquire 49% stake in GPL turned down

JSPL had sought government's approval for change in shareholding of GPL

The Odisha government has turned down Jindal Steel & Power Ltd (JSPL)’s proposal to acquire 49 per cent stake in Gopalpur Ports Ltd (GPL).

“Your proposal has no locus standi, according to the concession agreement of GPL. Any correspondence can only be entertained from the concessionaire, GPL. Therefore, your proposal cannot be considered,” Digvijayanath Padhi, joint secretary (commerce), wrote to head (operations), of JSPL.

“We have not received any such letter from the government. The company will respond after it gets the letter,” said a senior JSPL executive.

Earlier, JSPL was keen on acquiring 60 per cent stake in GPL. The state government had objected to this, saying it violated the terms of the concession agreement signed with the original promoters.

According to the pact, the original promoters had to retain at least 51 per cent stake for at least three years from the date of commencement of the port’s operations.

Initially, GPL was floated as a consortium of three partners---Hong Kong-based Noble Group, Odisha Stevedores Ltd (OSL) and Delhi-based Sara International Ltd (SIL). Noble Group had exited the consortium in May 2010.

The consortium was to develop the seasonal port at Gopalpur into an all-weather port. The port’s total capacity was envisaged at 54 million tonnes a year and it was to be developed at a cost of Rs 3,500 crore. Currently, OSL holds 50.5 per cent stake, while SIL holds 49.5 per cent.

The port started commercial operations last month---7,500 tonnes of ilmenite was shipped through a small vessel to South Korea.