KOCHI: The Opposition's allegation that the Adani Ports and SEZ Ltd (APSEZ), the flagship company of the Adani Group has already transferred a 49 per cent stake in the Vizhinjam port project to Mediterranean Shipping Company (MSC) without the Kerala government's approval may be wrong.
The Opposition statement appears at odds with the only official announcement released by Adani Group on the transaction, which says the deal remains subject to customary and regulatory approvals.
Leader of the Opposition, Pinarayi Vijayan, on Thursday cited provisions of the Share Purchase Agreement (SPA) to allege that the stake transfer had already been completed. He said it violating the concession agreement that reportedly requires prior government approval for any transfer exceeding 25 per cent of the concessionaire's shareholding.
However, the joint announcement by Adani Ports and MSC's Terminal Investment Ltd (TiL), released after the transaction was announced, describes the arrangement as a "definitive agreement" and states that the transaction is subject to customary approvals, including regulatory approvals.
The distinction could prove significant because, in corporate transactions, the signing of a share purchase agreement and the completion of the transfer are usually separate stages, with the latter taking place only after all conditions precedent and approvals are satisfied.
Another aspect of the transaction that has received relatively little attention is the structure of the much-publicised $1.397-billion (Rs13,220 crore) investment.
49% stake at $539 mn
According to the announcement, only about $539 million (Rs5,100.6 crore) relates to TiL's acquisition of a 49 per cent stake in Adani Vizhinjam Port Pvt Ltd (AVPPL) , the special purpose vehicle (SPV) holding the concession to develop and operate the port.
The remaining $858 million (Rs8,119 crore) is earmarked for funding the next phase of Vizhinjam's expansion through debt and equity participation up to December 2028, indicating that the headline transaction value is not entirely acquisition consideration.
The expansion commitment assumes significance for Kerala as the additional investment is expected to enhance the port's handling capacity over the coming years, potentially increasing cargo throughput and the state government's future revenue under the concession framework.
The transaction also highlights another important distinction often overlooked in public discussions. While the Kerala government owns the Vizhinjam port asset, Adani Vizhinjam Port Pvt Ltd is the concessionaire entrusted with developing and operating the project.
Kerala’s earnings to grow substantially
MSC's investment is in the concessionaire company and not in the ownership of the port itself.
With $858 million earmarked for expansion, rather than acquisition, the transaction also has implications for Kerala's future revenue. The investment is expected to raise the port's capacity over the next few years, potentially increasing the State government's share of revenue under the concession agreement as cargo volumes grow.
