Singapore's PSA Corporation has received New Delhi's approval to invest US$60 million (INR2.4 billion) to acquire a 49 per cent stake in the company that operates the container terminal at Kandla port in the Indian state of Gujarat.
PSA plans to purchase the equity interest in ABG Kandla Container Terminal Pvt Ltd from Mumbai-based ABG Infralogistics Ltd, India's biggest crane rental firm.
India's Foreign Investment Promotion Board (FIPB), which clears investments by foreign firms in the country, cleared PSA's proposal through a compulsorily convertible preference share subscription, according to an unidentified source close to the deal.
These preference shares, on conversion into equity shares after October 2011, would not exceed 49 per cent of the paid-up equity share capital of ABG Kandla Container Terminal, the operator of the terminal at the Kandla port, reports newsvine.com, a Seattle-based unit of MSNBC Interactive News (msnbc.com).
The Kandla container terminal handled 165,000 TEU in the 12 months ending March 2008. "By investing in Kandla, PSA will help boost volumes at the facility," said Saket Agarwal, managing director of ABG Infralogistics.
This development comes after PSA purchased in February a 49 per cent stake in ABG Kolkata Container Terminal Pvt Ltd, another subsidiary of the crane rental firm, for INR500 million. The container port operator also holds an 11.8 per cent interest in ABG Infralogistics.
India's container cargo has been increasing at a rate of more than 15 per cent a year, on the back of a 16 per cent rise in foreign trade, with container shipments comprising 30 per cent of the value of India's foreign trade. India's box traffic is estimated to reach 21 million TEU by 2016, up from seven million TEU at present.
The annual box handling capacity of the Kandla terminal is 450,000 TEU, and the facility is designed to handle small feeder ships that haul containerised cargo from India to ports in Singapore, Colombo and Dubai for transhipment.
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