Adani Ports and SEZ – Page 4

February 25, 2019February 25, 2019

Acquisition of Adani Agri Logistics a positive due to centre’s focus on agriculture, says Adani Ports

Indian billionaire Gautam Adani speaks during an interview with Reuters at his office in Ahmedabad, India, April 2, 2014. REUTERS/Amit Dave/File Photo - S1BETSDEMWAA

Adani Ports and SEZ on Monday said the acquisition of Adani Agri Logistics from Adani Enterprises a positive due to government’s focus on agriculture.

On Saturday, Adani Logistics, a subsidiary of Adani Ports, said it will acquire Adani Agri Logistics in an all-cash deal, which is expected to be completed by March.

In an interview to CNBC-TV18, Karan Adani, chief executive officer, said, “With the government’s focus on developing warehousing at agriculture level, there would be another 6-6.5 million tonne of tenders are expected in next 3-5 years. So, there is a lot of potential in the business.”

Talking about the valuations, he said independent valuations were done at arm’s length basis and the acquired company has a lot of growth potential.

According to Adani, Adani Agri Logistics has earnings before interest, tax, depreciation and amortization (EBITDA) of Rs 100 crore, which would likely go to Rs 170 crore by FY22 and expect it to double in the next 3-5 years.

He said Adani Ports will fund the acquisition through internal accruals as the company has a free-cash-flow of Rs 1,750-2,000 crore this year and would not look at increasing debt.

Going forward, Adani expects net debt to EBITDA to go down as most of the company’s debt borrowing is on a long-term basis of 5-10 years.

Adani Ports shares dive 9% on plan to acquire Adani Agri Logistics

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Summary

Adani Logistics, a unit of Adani Ports and SEZ on Saturday announced that it would be acquiring Adani Agri Logistics from Adani Enterprises in an all-cash deal.

Shares of Adani Ports and Special Economic Zone tanked as much as 9.1 per cent to Rs 322 on Monday in its biggest intraday per cent drop since January 28 after Adani Logistics, a unit of Adani Ports and SEZ on Saturday announced that it would be acquiring Adani Agri Logistics from Adani Enterprises in an all-cash deal.

“The transaction is proposed at an enterprise value of Rs 1,662 crore,” a statement said. Post the acquisition, the combined business EBITDA (earnings before interest, tax, depreciation and amortisation) will immediately double to Rs 200 crore, it added. The deal is expected to close by March 2019.

Adani Agri Logistics will add 28 locations and 7 trains to Adani Logistics network. “AALL targets to double infrastructure capacity in the next three years and tap the new 12.5 MMT infrastructure market as well as opportunities such as conventional storage conversion, among others,” the statement said.

Adani Ports shares were currently trading at Rs 325, down 8 percent from its previous close on the NSE. Adani Enterprises was down 2 percent at Rs 125.60. In comparison, the front-line Nifty50 was trading 0.2 percent higher at 10,809.

Moreover, Citi has downgraded Adani Ports to ‘neutral’ from ‘buy’, saying that the acquisition appears expensive and raised questions on capital allocation of the company. The brokerage believed that the acquisition might lead to a resurgence of investor concern around related-party transactions. Citi cut the target price to Rs 385 from Rs 500 per share.

Talking to CNBC TV18, Karan Adani, CEO of Adani Ports said, “With the government’s focus on agriculture sector increasing, the acquisition will be a positive step. It was intended to create presence in the logistic sector.

The company expects doubling of EBITDA in next 3-4 years. Current EBITDA is at Rs 100 crore. Going ahead, they also expect the net debt to EBITDA to come down. The net debt to EBITDA is currently at 2.75x.

“Most of the debt borrowing is on long term basis of 5-10 years. Independent valuation of the deal was done by E&Y,” Adani added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter