Gammon infrastructure to sell stake in Vizag Seaport

Gamma Infrastructure is planning to divest almost half of its stake in Vizag Seaport (VSPL), currently under a liquidity crunch. The company owns a 73.76% stake in VSPL that operates a multi-commodity terminal at the Centre-owned Visakhapatnam port in Andhra Pradesh. Gammon Infra is likely selling 35% of the total equity. Gammon Infra is looking for approval from its shareholders for the stake sale in VSPL, where British Virgin Islands-incorporated shipping and ports firm Lastin Holdings owns around 26% equity. VSPL had a consortium of investors that included the Gammon group, UK-based Portia Management Services (PMS) and Lastin Holdings at the time of incorporation in April 2001. PMS hived off its stake in favour of Gammon Infra during 2003-04. In November 2001, VSPL entered into a 30-year concession deal with the Visakhapatnam Port Trust. They built two multi-purpose berths with an aggregate cargo handling capacity of 7.7 million tonnes. The three Gammon Infra subsidiaries are facing insolvency while the others are dealing with financial stress. After exploring various options to sustain value and turnaround operations, a source told the media that the company has decided to divest a 35% stake in VSPL to infuse liquidity while retaining control over the subsidiary as the single largest shareholder. A senior Gammon Infra official informed the media that the Gammon Infra board has already adopted a resolution on the stake sale, which could be through renouncing the rights in a new issue of shares favouring prospective investors. The shareholders’ nod is being sought by convening an extraordinary general meeting. The official, who wanted to stay anonymous, confirmed the divestment proposal. Image Source Also read: NHAI to buy Sindhi dry port in Wardha district Also read: Visakhapatnam Port Trust to develop cruise terminal