DP World acquires 76% of India's Kribhco Infrastructure
The purchase consideration is below 1% of the port operator's net asset value as of fiscal year 2018
DP World acquired 76 per cent of Indian rail logistics company Kribhco Infrastructure through a joint venture with India's sovereign wealth fund, as the global ports operator seeks to expand inland operations.
Hindustan Infralog, a joint venture between DP World and India's National Investment and Infrastructure Fund (NIIF), bought the stake in Kribhco through its 90 per cent owned subsidiary Continental Warehousing Corporation, DP World said in a statement on Thursday to Nasdaq Dubai. Kribhco will retain the remaining 24 per cent share.
The acquisition in India "enables the DP World Group to become a significant operator in the fast-growing inland logistics market", said Sultan bin Sulayem, DP World's chairman. "We aim to continue adding scale to our offering to deliver greater efficiencies and value to the trade.”
Kribhco, established in 2009, operates three major inland container depots and private freight terminals at Pali in Haryana, Modinagar in Uttar Pradesh and Hazira in Gujarat, in addition to container train operations across India.
DP World operates five ports in India - Mundra, Nhava Sheva, Cochin, Chennai and Visakha, according to its website. The new logistics acquisition will provide additional rail connections to deliver cargo from its terminals to locations across the country.
The purchase consideration is below 1 per cent of DP World’s net asset value as of December 31, 2018, the company said, without providing a specific value.
"In India, we have made strong progress in building an integrated logistics platform which can deliver a competitive solution to cargo owners and we aim to continue adding scale to our offering to deliver greater efficiencies and value to the trade," Mr bin Sulayem said.
Kribhco said it is "excited" about the significant growth potential of logistics infrastructure in India.
"We believe the strategic partnership with Continental Warehousing Corporation will enable KRIL’s assets to improve efficiencies, offer a compelling value-add solution to customers and deliver long-term value for all stakeholders," said Chandra Pal Singh, chairman of Kribhco.
In March 2018, DP World and its joint venture with NIIF bought a 90 per cent stake in logistics company Continental Warehouse Corporation based in Mumbai.
Hindustan Infralog, the investment vehicle set up as a joint venture between DP World and NIIF, pledged to invest up to $3 billion (Dh11 bn) in ports, logistics and related sectors.
In April, DP World reported volumes at its container terminals declined slightly in the first quarter, citing a stronger performance in the same period last year and uncertainty in the global economy.
Gross container volumes dropped 0.6 per cent from a year ago on a reported basis and 0.7 per cent on a like-for-like basis. The Dubai company handled 17.5 million twenty-foot equivalent units in the first quarter across its global terminals.
Among its regions, gross volumes in Asia Pacific and India grew 3.5 per cent in the first quarter year-on-year.
The company reported a 10.2 per cent rise in annual profit of $1.3bn in 2018, compared to $1.18bn in 2017, driven by acquisitions and growing global trade despite trade tensions and geopolitical headwinds.
Updated: May 23, 2019 06:11 PM