Krishnapatnam Port Company (KPC) Ltd, which is developing the private, deepwater, all-weather port on the Andhra Pradesh coastline, is betting big on the power units coming up in the state and in Tamil Nadu. The port is looking to specialise in handling coal, which is a key input for the power plants, and create special facilities for the units importing coal. According to estimates, about 10,000 mw capacity is being created around the port. This capacity will become fully operational by 2013.
CV Rao, chairman of the Navayuga Group, which is developing the port, said, "We expect to handle about 35-40 million tonnes of coal at the port once the new power units start production. Most of the capacity is likely to become operational by 2013. Out of the 12 berths, which would be ready shortly, we are allotting 6 for coal alone. Our intention is to make the port a coal hub."
The Krishnapatnam port has a newly developed industrial belt adjacent to it in Naidupet and Tada in Andhra Pradesh. Besides medium-sized power units, an ultra mega power project (UMPP) is coming up near the port. "We have already signed port service agreements with many of the units and SEZs coming up in the area.
They will all use the port for various logistics purposes," Rao said.
The port is on the east coast in the Nellore district and about 180 km from Chennai. Navayuga is developing the port in three phases. The first phase has already become operational at an investment of Rs 1,400 crore.
On Tuesday, the company achieved financial closure of Rs 4,000 crore for the second phase. Of this, Rs 3,500 crore was raised as debt from a consortium of 16 banks, led by the State Bank of India. The remaining funds are being brought in through other sources of funding including internal accruals.
"Our average cost of borrowing is about 11-11.5% and all the debt is taken on floating interest rate. We know this rate is expensive. But, in the given market conditions we had to go for debt. However, since it is a floating rate, we expect some benefits depending on the fluctuations," Rao said.
In the first phase, which became operational in July 2008, the port has the capacity to handle 25 million tonnes per annum with four berths. KPC claims to have handled about 9 million tonnes of cargo, including iron ore, fertilisers, granite and coal. It expects to close this fiscal with revenues of Rs 300 crore, which it hopes to double to Rs 600 crore next fiscal. In the second phase, the port will add eight berths and begin commercial operations in January 2012.
Recently, private equity investor Strategic Port Investments KPC Ltd invested Rs 800 crore in the port by acquiring minority equity stake.
"We hope to offer an exit to the investor by 2014. There are many options for exit other than an IPO," Rao said. The promoters and investors have already pumped in Rs 1,400 crore into KPC and all further expansions will be through internal accruals.
CV Rao, chairman of the Navayuga Group, which is developing the port, said, "We expect to handle about 35-40 million tonnes of coal at the port once the new power units start production. Most of the capacity is likely to become operational by 2013. Out of the 12 berths, which would be ready shortly, we are allotting 6 for coal alone. Our intention is to make the port a coal hub."
The Krishnapatnam port has a newly developed industrial belt adjacent to it in Naidupet and Tada in Andhra Pradesh. Besides medium-sized power units, an ultra mega power project (UMPP) is coming up near the port. "We have already signed port service agreements with many of the units and SEZs coming up in the area.
They will all use the port for various logistics purposes," Rao said.
The port is on the east coast in the Nellore district and about 180 km from Chennai. Navayuga is developing the port in three phases. The first phase has already become operational at an investment of Rs 1,400 crore.
On Tuesday, the company achieved financial closure of Rs 4,000 crore for the second phase. Of this, Rs 3,500 crore was raised as debt from a consortium of 16 banks, led by the State Bank of India. The remaining funds are being brought in through other sources of funding including internal accruals.
"Our average cost of borrowing is about 11-11.5% and all the debt is taken on floating interest rate. We know this rate is expensive. But, in the given market conditions we had to go for debt. However, since it is a floating rate, we expect some benefits depending on the fluctuations," Rao said.
In the first phase, which became operational in July 2008, the port has the capacity to handle 25 million tonnes per annum with four berths. KPC claims to have handled about 9 million tonnes of cargo, including iron ore, fertilisers, granite and coal. It expects to close this fiscal with revenues of Rs 300 crore, which it hopes to double to Rs 600 crore next fiscal. In the second phase, the port will add eight berths and begin commercial operations in January 2012.
Recently, private equity investor Strategic Port Investments KPC Ltd invested Rs 800 crore in the port by acquiring minority equity stake.
"We hope to offer an exit to the investor by 2014. There are many options for exit other than an IPO," Rao said. The promoters and investors have already pumped in Rs 1,400 crore into KPC and all further expansions will be through internal accruals.