MUMBAI: India’s largest port company Adani Ports and Special Economic Zone Ltd (APSEZ) is set to sign an agreement with Larsen and Toubro (L&T) to take over operation and management (O&M) of the Kattupalli port at Ennore in Tamil Nadu.
L&T holds 97% stake in Kattupalli International Container Terminal, a port-cumnaval shipyard complex developed jointly with state government entity TIDCO, which holds the remaining stake. However, L&T will continue to run the shipyard, which will not be part of the O&M deal. Kattupalli can handle 1.2 million twenty-foot equivalent units (TEUs) a year.
In an interview to TV channel CNBC TV18 earlier in the day, L&T’s group executive chairman AM Naik said the company will ‘hopefully finalise the deal in some time’. He said the L&T wants to cut out assets, such as those in the port sector, that are not its speciality. When contacted, an L&T spokesman didn’t offer further comments.
A spokesman at Adani didn’t respond to emailed queries before the story went to print. Taking over operation and management of the port is a precursor to a potential sale. L&T, which has interests in roads, power plants, shipbuilding and real estate among others, has been exiting some non-core businesses. It had put Kattupalli port on the block about two years back. But due to the complex structure of the entity, any deal would require demerging the container terminal from the naval shipyard. The separation and sale would also need Tamil Nadu government’s approval. Until then, Adani will help attract shipping lines to the port to beef up cargo volumes.
