APM Terminals, one of the largest container operators in the world, is in talks to buy a majority stake in Larsen & Toubro's Kattupalli port, which has been struggling to attract shipping lines since its inception.
The Economic Times earlier reported that L&T is looking to sell a stake in the ports business of Kattupalli International Container Terminal, a US$644.48 million port-cum-shipyard complex developed jointly with state government entity TIDCO.
India's biggest construction and engineering group is not keen to sell the shipyard business, which it hopes to leverage in future to get defence shipbuilding contracts.
"APM Terminals is looking for a majority stake in the port with management control. Minority stake does not make sense for them," said a person familiar with the matter. However, the person did not wish to be named as the discussions were confidential.
L&T, though, is yet to make up its mind on whether to sell a majority or a minority stake, the person said.
The person declined to share a possible bidding price as the discussions were still in early stages and the port faced issues regarding the lack of railway connectivity and limited road network.
L&T has engaged L&T Infra Finance's advisory services to scout for potential buyers, another person familiar with the matter told ET.
L&T holds a 97 percent stake in the port-cum-shipyard complex while TIDCO holds the remaining stake.
L&T is looking at an enterprise value of $371.6 million to $403.91 million for its stake in the port operations.
"As a large business organisation, review is a continuous process at L&T. We always examine new business opportunities and facilities. However, we comment on such developments only after a decision is arrived at, and do so in compliance with the regulations governing dissemination of such information," L&T spokesperson told ET on email.
APM Terminals, the port arm of A P Moller-Maersk, headquartered in The Hague, Netherlands, holds a 43.01 percent stake in Gujarat Pipavav port and runs a container terminal called Gateway Terminals at Jawaharlal Nehru Port Trust (JNPT) in Mumbai.
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