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Aegis Logistics to form JV with Royal Vopak of the Netherlands

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Aegis Logistics and Royal Vopak of the Netherlands will form a joint venture (JV) - Aegis Vopak Terminals (AVTL), with the aim to grow together in the LPG, chemicals storage and handling business.

The new partnership will operate a network of terminals that are currently located in five strategic ports along the east and west coast of India. With a total capacity of around 9,60,000 cubic metre, the partnership will become one of the largest independent tank storage companies for LPG and chemicals in India. LPG is earmarked by the Indian government to provide cleaner and safe cooking fuels for households.

The partnership is expected to provide further growth, which targets mainly LPG and also chemicals and industrial terminal opportunities. This investment would help Royal Vopak towards its strategy to allocate capital to grow in gas markets. The transaction is expected to close early 2022, subject to customary closing conditions. The announcement was made before market hours today, 13 July 2021.

Commenting on the same, Raj Chandaria, the chairman of Aegis Logistics, stated: "This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects including renewables, in partnership with the world's leading independent tank storage company. We expect the deal to be significantly earnings enhancing for Aegis shareholders due to the deployment into growth opportunities of the combined financial firepower of the two groups and management in the terminals business."

Eelco Hoekstra, the chairman of the executive board and chief executive officer (CEO) of Royal Vopak, has said that: "This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next ten years in line with the new joint ventures and India's ambition for LPG. We are very excited for this new partnership. Aegis is a reputed local partner with a ready organization and proven track record of conceiving and executing tank farm assets in strategic locations along the Indian coastline."

Aegis Logistics' consolidated net profit soared 50.2% to Rs 69.98 crore on 18.6% decline in net sales to Rs 1,011.17 crore in Q4 FY20 over Q4 FY19.

Aegis Logistics is an Indian oil, gas and chemical logistics company. The company has five distinct but related business segments, and operates a network of bulk liquid terminals, liquefied petroleum gas (LPG) terminals, filling plants, pipelines, and gas stations to deliver products and services.

Shares of Aegis Logistics dropped 5.01% to Rs 344.85 on BSE. The scrip reversed trend after hitting an all-time high of Rs 394.40 in initial deals today.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Tue, July 13 2021. 15:10 IST