Coal News We love to talk!
Edelweiss Asset Reconstruction Co. (ARC) Ltd is in advanced talks with the Netherlands-based Stolt-Nielsen Ltd to set up an LNG terminal at Karaikal port on the east coast, two people familiar with the development said.
The liquefied natural gas (LNG) terminal, when commissioned, will give a boost to the port’s fortunes given that it is currently equipped to handle only bulk cargo, the two persons cited above added.
“Given the fact that most of India’s LNG terminals are located on its western coast, setting one up at Karaikal, which is on the east coast, will undoubtedly turn around the port. Setting up a container terminal at the port is also being discussed,” one of the two people cited above said.
Karaikal Port Pvt. Ltd (KPPL)—a special purpose vehicle—was set up in 2006 after a concession agreement was signed between the Puducherry government and Marg Ltd to set up an all-weather port in Karaikal.
But after getting commissioned in 2009, the port ran into rough weather and struggled to service its debt. That’s when Edelweiss ARC came into the picture and started accumulating its debt; it currently holds over 95% of the port’s outstanding debt.
Earlier this year, the ARC also took control of the day-to-day operations of the port, which Marg was earlier unwilling to cede. That was the reason for the Shapoorji Pallonji Group not picking up a 51% stake in the port, even though the valuation too had been agreed on, Mint reported in March.
“While Edelweiss is doing a good job of turning the port’s fortunes around, a big challenge for it is that the four private equity (PE) players—Jacob Ballas India, Standard Chartered PE, IDFC Project Equity and Ascent Capital—that together hold over 40% of its equity, don’t see eye to eye. That’s a bit of a roadblock since the structure that’s being planned would require the LNG terminal operator to bring in a substantial amount of equity,” said the second person cited above.
Hence, he added, the signing of the final term sheet will take a couple of months more and the project will take off only after 4-5 months. Last month, The Economic Times had reported that Edelweiss ARC was looking to set up an LNG terminal at Karaikal port, a move that would push back the exit plans of its PE investors.
Emails sent to Karaikal Port remained unanswered till the time of going to print. An official spokesperson for Edelweiss ARC refused to comment on the issue.
- Torrent Power's plants to get gas subsidy Read more
- Govt to launch LPG SAHAJ online connection scheme today Read more
- Mexico luring ONGC may boost Narendra Modi's energy hunt Read more
- SC disposes ONGC-Gujarat govt royalty payment case Read more
- General Electric optimistic of opportunities from government's infrastructure thrust Read more
- MoEF gives nod to Oil India for exploration in KG basin Read more
- Most hydel power projects to become operational after 2017 Read more
- Rajasthan State Gas lines up Rs 2,700 crore to build infrastructure Read more
- Domestic oil, gas companies feel the heat Read more
- ONGC may bid for 'unviable' fields after new policy on sale of gas Read more