Krishnapatnam Port ties up funds for phase-II

The Rs 4000-cr second phase will be commissioned by Jan 2012.

Krishnapatnam Port Company Limited (KPCL), promoted by the Hyderabad-based Navayuga group, has achieved financial closure for the Rs 4,000-crore phase II development of the all-weather deep water Krishnapatnam port on the eastern coast in Nellore district of Andhra Pradesh.

KPCL has already completed the second phase works to the tune of Rs 500 crore and a consortium of 16 banks led by State Bank of India has agreed to lend the remaining Rs 3,500-crore required for completion of the project, Navayuga group chairman, CV Rao, told mediapersons here on Wednesday.

The second phase of KPCL, expected to be commissioned by January 2012, comprises seven berths capable of handling 10 vessels and a cargo of 40 million tonnes per annum (mta).

The Rs 1,400- crore phase I of the project, which has the capacity to handle 25 mta, was completed last year and trial operations started in July 2008. Commercial operations are about to start by this month-end. The port has already handled 8 mt so far and expects to handle a total of around 9 mt in the current financial year.

Recently, Strategic Port Investments KPC Limited, belonging to the 3i group, invested Rs 800 crore in KPCL by acquiring a minority equity stake in the company. “The promoters have already invested Rs 600 crore and the total equity-base of the company is now Rs 1,400 crore, which is sufficient for phase III expansion also. All further expansions will be taken care by internal accruals,” Rao said, adding KPCL’s revenues would go up from Rs 300 crore this year to Rs 600 crore next year.

3i would be provided with an exit route for its investment in 2014. “It is a structured investment and the private equity firm has various options for exit, not necessarily through the initial public offering,” Rao said.

According to Rao, KPCL will achieve break-even by 2013 when its revenues are expected to be around Rs 2,500 crore. The port will finally have 12 berths and its capacity will go up to 100 mta by 2025. About six berths will be dedicated for handling of coal as 10,000 Mw capacity coal-based power plants are coming up in the vicinity of the port.