Adani Ports floats unit in Oman, seen closing in on Salalah Port

Mumbai: Adani Ports and Special Economic Zone (APSEZ) appears to be moving closer to a role in the Port of Salalah, Oman's largest port and a big regional container transhipment hub, expanding its global business after establishing a presence in Israel, Colombo, Tanzania and Australia.

That a deal was possibly on the horizon was hidden in an October 22 regulatory filing, where India's biggest private port operator said it incorporated a company, Indian Ocean Gateway Terminal, in the Sultanate of Oman a day earlier.

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The regulatory filing did not mention anything about the Port of Salalah. But a disclosure days earlier by the current operator of the Salalah Port, that its existing concession agreements ending in two years would not be extended, lends credence to APSEZ's potential involvement in running the port, said port industry insiders.

At APSEZ's earnings call on Wednesday, chief executive Ashwani Gupta said the company was evaluating more than 20 overseas assets for potential acquisition. But floating a unit in Oman did not mean a decision was made to acquire an asset there, he said.

The Oman government could not be reached for comment.

Industry insiders said it would be hard to believe APSEZ's move to float a unit in Oman just like that unless there was something concrete happening. "The two announcements make it abundantly clear that APSEZ is close to striking a deal with the Oman government on Salalah Port," said an industry insider. APSEZ and the Oman government are said to be giving final touches to a deal, which is expected to be announced shortly, he said.

ET could not independently verify talks between APSEZ and Muscat.

Eyeing overseas acquisitions

The company keeps on evaluating international acquisitions, Gupta said on the earnings call. "We have more than 20 today around the world which we are evaluating," he said.

Any acquisition must contribute to both revenue and profit growth at a rate at least in line with APSEZ's own growth, he said. The company will also assess geopolitical and macroeconomic conditions, the availability of funding in the target market, and the local leadership team or partner before making a decision. "If we are ticking the four boxes, definitely we will go for it," Gupta said.

In developed markets, APSEZ will assess the underlying business and cargo opportunities before deciding whether an asset offers adequate returns, he said.

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The company has evaluated Associated British Ports, the UK's largest port operator, but found that the asset did not meet its return requirements.

No extension for Salalah operator

Salalah Port Services Company SAOG, which has been operating the port under a 30-year contract since 1998, informed the Muscat Stock Exchange on October 18 that it "received formal notification from the Ministry of Transport, Communications and Information Technology confirming that the existing concession agreements will not be extended beyond their contractual expiry date of 1 November 2028".