Eredene Capital PLC, a UK based infrastructure fund has withdrawn from the Ennore Port container terminal project with immediate effect. It may be noted the fund, trading on the Alternative Investment Market (AIM) of the London Stock Exchange, was holding 22% stake in the Rs 1,407 crore project.
“The concession awarding body, Ennore Port Limited, has been informed of this decision, which was taken in light of the changed economic outlook in India since the concession was granted - the increased cost of local financing, depreciation of the Indian Rupee and lower projected growth in container traffic,” the fund said in the statement.
Ennore Port CMD S Velumani was not available for comment.
It may be noted, the Ennore Port Ltd (EPL), country's first corporate port set up the Union Government, in August 2010 signed a concession agreement with Bay of Bengal Gateway Terminals Pvt Ltd, to develop a Rs 1,407 crore container terminal at Ennore port, near Chennai.
Bay of Bengal Gateway is a special purpose vehicle (SPV) company formed for the project with members being Grup Maritim TCB, S L Spain; Obrascon Huarte Lain, S A, Spain; Lanco Infratech Ltd and Eredene Capital PLC, UK/India, which has a 22% shareholding in BoB.
To date, Eredene has incurred costs connected with the Ennore Project of £1.6m. The value of Eredene's involvement in the Ennore Project (including all capitalised costs) was written down to zero in the last financial year as reflected in the Annual Report and Accounts released to the London Stock Exchange on 13 July 2012. The board of BoB has commenced the winding up of BoB.
Eredene also announced in the Annual Report and Accounts on 13 July 2012 that it was to return £15.3m to shareholders of the £29.5m that had been raised in connection with the Ennore Project. That return of capital was completed in August 2012.
Eredene is currently engaged in a detailed review of its investments in India which is being undertaken by the new internal team headed by Ranveer Sharma. This detailed review is scheduled to be completed by early December 2012. On completion of this detailed review, and when the winding up of BoB is further progressed, the board of Eredene expects to make an announcement regarding a further return of capital.