Tata, L&T may find exit from Dhamra port tough

Reports had said Tata Steel and L&T wanted to sell their entire stake in Dhamra, to the Adani Group. L&T later denied it had any such plan

Stake sale by the existing promoters of Dhamra and Gopalpur ports might get tougher. The Odisha government’s commerce and transport department has proposed to amend some conditions of the concessional pacts signed with port developers.

The revised terms would make it mandatory for the original promoters to retain at least 51 per cent stake for three years from the date of commencement of commercial operations. The existing condition allows dilution of equity to below 51 per cent after a non-major port starts these operations.

“In addition, a third-party audit of port operations will also apply to the port's construction phase, apart from operational and financial matters. The revised terms will apply to all non-major port developers,” said a source at the department.

Dhamra Port Company Ltd, a 50:50 joint venture between Tata Steel and Larsen & Toubro, began commercial operations in May 2011. Earlier, there were reports that both Tata Steel and L&T would sell off their entire stake in Dhamra, a deep draught port along the coast of north Odisha, to the Adani Group. Later, L&T denied stake sale plans, maintaining that Dhamra port ownership was currently under ‘status quo’. Gopalpur port started commercial operations last month, when 7,500 tonnes of ilmenite, the sand mineral product of Odisha Sands Complex, a unit of Indian Rare Earths Ltd, was shipped through a small vessel to South Korea. The port was being developed into an all-weather one by Gopalpur Ports Ltd. Initially, GPL was floated as a consortium of three partners -- Odisha Stevedores Ltd, the Delhi-based Sara International and the Hong Kong-based Noble Group.

The last-named partner exited the consortium in May 2010. Later, Jindal Steel & Power Ltd (JSPL) had evinced interest in acquiring 49 per cent stake in the consortium. The existing promoters of GPL are yet to decide on allowing JSPL to take stake in the Special Purpose Vehicle. Jindal said the promoters were okay with their entry but thee company was awaiting the response of the state government, whose approval is needed for any change in shareholding pattern.
STRICTER TERMS

• Dhamra Port Company Ltd, a 50-50 joint venture between Tata Steel and Larsen & Toubro Ltd began operations in May 2011
• Goplapur Port was floated as a consortium by Odisha Stevedores Ltd, Delhi-based Sara International Ltd and Hong Kong-based Noble Group
• After Noble Group exited the consortium in May 2010, Jindal Steel & Power Ltd (JSPL) had shown interest in acquiring 49% stake in the consortium. The remaining promoters are yet to take a call on allowing JSPL to pick up stake
• Revised terms would make it mandatory for the original promoters to retain at least 51% stake for three years from the date of start of operations
• A third-party audit of operations would also apply to the port’s construction phase, apart from operational and financial matters
• The revised terms would apply to all non-major port developers, said a commerce & transport department source