No exclusivity for MSC at Vizhinjam, deal subject to Kerala govt approval: Adani Ports

The Adani Ports and Special Economic Zone Ltd. (APSEZ) has said its proposed sale of a 49 per cent stake in Vizhinjam International Seaport to the Mediterranean Shipping Company (MSC) Group's terminal arm will proceed only after obtaining all mandatory approvals, including that from the Kerala government.

In a statement, APSEZ CEO Aswani Gupta clarified that the company had so far only signed a binding agreement for the proposed transaction with Terminal Investment Limited (TiL), the terminal operating arm of MSC.

"We are strictly following the process for a listed company. Signing binding agreement is a start of process to take all necessary approvals like the Competition Commission of India (CCI), the Kerala government, etc," Gupta said.

He stressed that the transaction would be completed only after all statutory approvals were secured.

On Tuesday, APSEZ and TiL announced an agreement under which TiL will acquire a 49 per cent stake in Adani Vizhinjam Port Private Limited (AVPPL). The announcement triggered a political storm in Kerala, with both the ruling government and the opposition raising objections to the proposed stake sale.

Chief Minister V D Satheesan, in a letter to the company, expressed concern over the move, stating that the Vizhinjam International Seaport was developed under a concession agreement between the Kerala government and the concessionaire. Under the agreement, any change in the shareholding pattern of the concessionaire requires the prior approval of the state government, he said.

Leader of the opposition Pinarayi Vijayan also voiced concerns, alleging that the proposed stake sale could lead to monopolistic pricing and deprive other stakeholders of access to a competitive common-user facility.

Responding to the criticism, Aswani said there was no reason for concern, asserting that MSC would not enjoy any "exclusivity" at the port. He added that the port would remain open to all partners across the world in accordance with the concession agreement.

Aswani also highlighted APSEZ's relationship with the state government, saying Kerala's support had been instrumental in the rapid development of the Vizhinjam port.

"We have a great relationship with Kerala government. With their support only, Vizhinjam could achieve so much in so much less time," he said, adding that APSEZ hoped to take the port "to the next level" with the continued support of both the state and central governments.

According to Aswani, the partnership with MSC would also create opportunities to expand the port's business beyond container transshipment, including in EXIM cargo, cruise operations and bunkering services.