MUMBAI: Gautam Adani-promoted Adani Ports and Special Economic Zone (APSEZ) on Thursday said it has completed the sale of Myanmar port Coastal International Terminals Pte Limited for $30 million.
This amount is much lower than what India’s largest private port operator had invested in the terminal.
As per a regulatory filing by APSEZ, the port is sold to a firm called Solar Energy Limited. The whereabouts and directors of Solar Energy were not shared by Adani Group but it is said the firm doesn’t belong to the promoter Group and the transaction would not fall within related party transactions. Post the stinging report of Hindenburg Research in January 2023, the Group’s dealing with the relatively lesser-known companies is under scrutiny.
A query sought from the conglomerate on the buyer remained unanswered. As per a statement by Adani in May 2021, it had made an investment of $127 million, including $90 million for upfront payment for land lease. Reports claim Adani may have invested about $195 million in the project, which is yet to commence operations.
The project had run into controversy after it was reported the Gautam Adani firm had paid $30 million to a Myanmar military-controlled firm for the deal. APSEZ had denied the allegations of any wrongdoing.
The SPA had certain Condition Precedents (CPs), including completion of the project and relevant approvals for smooth conduct of business by the buyer.
In a statement, APSEZ said given the continuous delay in the approval process and challenges in meeting certain CPs, APSEZ has obtained an independent valuation on "as is where is" basis.
Thereby the buyer and seller have renegotiated the sale consideration to USD 30 million, it added.
According to the statement, the buyer will pay the said amount to the seller within three business days on completing all the necessary compliance by the seller.
On receipt of the total transaction value, APSEZ shall transfer the equity to the buyer and its exit will stand concluded, it said.
APSEZ chief executive officer and whole-time director Karan Adani said that this exit is in line with the guidance provided by the APSEZ Board based on the recommendations made by the risk committee in October 2021.
The project had run into controversy after it was reported that APSEZ chief executive Karan Adani had in July 2019 met Senior General Min Aung Hlaing, the Myanmar's army chief who led a coup against the elected government.
In August 2021, APSEZ had said its investment in a port in Myanmar was not in violation of any sanction guidelines issued by the Office of Foreign Assets Control (OFAC) of the US Department of Treasury.
Adani group had previously said it had won the Yangon International Terminal project through a global competitive bid.
The project required USD 290 million investment.
APSEZ, the largest port developer in India, is part of the globally diversified Adani Group.
(With inputs from PTI)