 "chart")
India’s largest private port operator Adani Ports and Special Economic Zone (APSEZ) on Thursday announced the sale of the controversial Myanmar Port for a total consideration of $30 million, which is $120 million less than its last-known investment value in the port.
Karan Adani, chief executive officer and whole-time director of APSEZ, said: “This exit is in line with the guidance provided by the APSEZ Board based on the recommendations made by the risk committee in October 2021.”
In May 2022, the company had announced signing of a share-purchase agreement for the sale of its Myanmar Port. The pact had certain condition precedents (CPs), including completion of the project and relevant approvals for smooth conduct of business by the buyer.
“Given the continuous delay in the approval process and challenges in meeting certain CPs, the APSEZ has obtained an independent valuation on “as is where is” basis. Thereby, the buyer and seller have renegotiated the sale consideration to $30 million. The buyer will pay the said amount to the seller within 3 business days on completing all the necessary compliance by the seller,” the APSEZ said in a statement.
The buyer, according to the company’s regulatory filing, is a firm called Solar Energy. Further details remain unknown.
On receipt of the total transaction value, APSEZ will transfer the equity to the buyer and its exit will be concluded, it said.
The project, announced in May 2019, had landed the port operator in controversy following a military coup in February 2021. There were allegations that the conglomerate de-facto was facilitating genocidal actions in the country after the US had imposed sanctions on the country’s military officials responsible for the coup.
“Considering the subsequent military coup in Myanmar and continuity of sanction imposed by the US on the Myanmar economic cooperation. Since February 2021, the company based on the risk committee recommendation has decided to exit its investment in Myanmar, which we expect to conclude by the end of this financial year,” Adani had said in the company’s October 2021 earnings call.
He had said the APSEZ’s total investment in the port was $150 million. However, the present value of investments remains unknown. The firm had paid a $90 million upfront payment for land lease.
In August 2019, a United Nations fact-finding mission had highlighted the role of foreign businesses in Myanmar’s developments
“The mission finds that any foreign business activity involving the Tatmadaw and its conglomerates MEHL and MEC poses a high risk of contributing to, or being linked to, violations of human rights law and international humanitarian law. At a minimum, these foreign companies are contributing to supporting the Tatmadaw’s (Myanmar military) financial capacity.”
At the same time, the company had reportedly said that it was not in violation of any sanction guidelines issued by the Office of Foreign Assets Control (OFAC) of the US Department of Treasury.
Meanwhile, delays in completion of the sale were due to the company’s commitment to execute it in a “correct way”.
