New Delhi:
Adani Ports and SEZ Ltd, India’s biggest private port operator, announced on Thursday a $2.4 billion non-cash acquisition of a coal export terminal in Australia from a group company to strengthen its presence in the Asia-Pacific region.
The Board of APSEZ “approved the acquisition of Abbot Point Port Holdings Pte Ltd (APPH), Singapore, from Carmichael Rail and Port Singapore Holdings Pte Ltd, Singapore (CRPSHPL)”, the company said in a statement. CRPSHPL is a related party.
APPH owns the entities which own and operate the North Queensland Export Terminal, a dedicated export terminal with a current nameplate capacity of 50 million tonnes per annum (MTPA). The terminal is located at the Port of Abbot Point, approximately 25 km north of Bowen in North Queensland on Australia’s east coast.
APSEZ had originally, in 2011, acquired the North Queensland Export Terminal (NQXT) at Abbott Point for $2 billion. Two years later, in 2013, the Adani family purchased the asset from APSEZ for the same amount, along with the capital invested, enabling the company to concentrate on expanding its domestic operations.
Now, with a strengthened balance sheet and a dominant position in India, APSEZ is re-acquiring the terminal as part of its global growth strategy.
“The transaction will be completed on a non-cash basis. APSEZ will issue 14.38 crore new equity shares to CRPSHPL in exchange for the acquisition of 100 per cent interest in APPH. This is based on an enterprise value of NQXT of Australian Dollar 3.975 billion (about $2.4 billion),” the statement said.
The acquisition is valued at almost similar levels to the transfer done in 2013. This valuation is despite capital investments, growth and inflation of the past 12 years and at slightly discounted multiples to the recent deals in the region.
“As part of the transaction, APSEZ will also assume other non-core assets and liabilities on APPH’s balance sheet, which APSEZ will realise within a few months of the acquisition (zero net impact on the transaction valuation). APSEZ’s leverage will remain at similar levels post the transaction,” the statement said without giving details of the liabilities.
The acquisition will accelerate the APSEZ’s target of doubling its volumes to 1 billion tonnes per annum by FY30, with a potential to near quadruple its volume – from 35 million tonnes in FY25 to 120 million tonnes, including potential exports of green hydrogen from Australia, the company said.
This is the fourth overseas acquisition for India’s largest port developer in the past two years. With this, the company will have a portfolio of 19 ports and terminals – 15 domestic and 4 overseas. A port in Israel, terminals in Tanzania and Sri Lanka are the other three international locations where APSEZ has its operations.
NQXT has a contract with Bravus Mining and Resources (formerly Adani Mining, fully owned by Adani Enterprises) for the export of 9.3 million tonnes of thermal coal from the Adani Carmichael coal mine.
The move by APSEZ comes at a time when the global ports industry is gaining strong prominence amid rising trade tensions, particularly between the US and China.
US investment giant BlackRock is reportedly seeking to acquire Panama Ports from Hong Kong-based conglomerate CK Hutchison for $23 billion but has faced resistance from Chinese stakeholders.
Last year in January, BlackRock also acquired Global Infrastructure Partners (GIP), which holds stakes in ports globally in a $12.5 billion deal.
In 2019, DP World increased its stake in its Australian port at a slightly higher valuation multiple of 18x EV/EBITDA. APSEZ is acquiring NQXT at a near 17x.
“For APSEZ, India will continue to remain an area of focus. The company is very selective in its overseas plans and will only participate in locations where Indian trade routes will play a significant role. This acquisition will bring in all group ports under one roof, allowing higher synergies,” said a senior company official explaining APSEZ’s approach to overseas expansion.
Having no direct exposure to the western region, NQXT, the deep-water terminal has 90 per cent exposure to the faster-growing Asian market, with China and India accounting for nearly half of the volumes, said a senior company source.
Based in Queensland, this deepwater port is near Bowen and Galilee mining basins and has a high-quality customer base, said the company.
On FY25 numbers, the acquisition will add 8 per cent to APSEZ’s volumes and 6.4 per cent to its EBITDA.
Even though not a part of China’s Belt and Road Initiative, Australia, one of the most resource-rich nations, has drawn nearly $9 billion in Chinese investment in its ports sector, second only to Tanzania. Australia also remains an important trading and strategic partner for India when it comes to natural resources.
Speaking on the acquisition, APSEZ CEO Ashwani Gupta said, “NQXT’s acquisition is a pivotal step in our international strategy, opening new export markets and securing long-term contracts with valued users. Strategically located on the East-West trade corridor, NQXT is poised for robust growth as a high-performing asset, driven by increased capacity, upcoming contract renewals in the medium term, and the potential for green hydrogen exports in the long term. We are targeting EBITDA growing to Australian Dollar 400 million within 4 years.”
The Port of Abbot Point (within which NQXT is located) has been declared as a strategic port and a Priority Port Development Area by the Queensland Government.
NQXT is under a long-term lease from the Queensland Government and is a critical infrastructure asset supporting Australia’s significant resource industry.
It provides strategic access to currently eight major customers under long-term ‘take or pay’ contracts. During FY25, NQXT had a contract capacity of 40 million tonnes and handled an all-time high cargo volume of 35 million tonnes. Cargo from NQXT was exported to 15 countries, including 88 per cent to Asia and 10 per cent to Europe.
NQXT posted Australian Dollar 349 million in revenue and EBITDA of Australian Dollar 228 million in FY25.
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