Sunday, May 15, 2022
HomeBusinessAdani Group acquires 100% stake In Ocean Sparkle, the largest marine service...

Adani Group acquires 100% stake In Ocean Sparkle, the largest marine service company

Adani Ports and Special Economic Zone (APSEZ) is buying 100 per cent ownership in Ocean Sparkle (OSL), a major third-party marine services provider, for Rs 1700 crore via its subsidiary Adani Harbour Services.

With a fleet of 94 own boats and 13 third-party-owned vessels, Ocean Sparkle is a major participant in towage, pilotage, and dredging. The business, founded in 1995 by a group of maritime technocrats with P Jairaj Kumar as chairman and MD, has Rs 300 crore in free cash. Kumar will remain chairman of the OSL board of directors.

“Given the merger between OSL and Adani Harbour Services, the combined company is anticipated to get larger in five years with increased margins, providing considerable value for Adani ports shareholders,” said Karan Adani, CEO and Whole-Time Director of APSEZ.

“This acquisition gives Adani ports a significant share of India’s marine services market, but it also gives us a platform to expand our presence in other countries,” he said. “This will help APSEZ become the world’s largest port operator by 2030 and India’s largest integrated transport utility,” he added.

The existing clientele has been with OSL for a long time, with contracts spanning 5 to 20 years (the average length of contracts is seven years).

Adani acquires India's largest marine services co Ocean Sparkle for Rs  1,530 cr - BusinessTodayFurthermore, the contracts are on a take-or-pay basis, ensuring OSL’s business model’s stability. The firm serves all of India’s main ports, 15 smaller ports, and three LNG terminals.

Ocean Sparkle 

Ocean Sparkle is in the port operations and maritime services market. The firm was founded in 1995 by a group of marine technocrats, with P Jairaj Kumar as chairman and MD, and he will continue to serve on the OSL board of directors.

Towage, pilotage, and dredging services are among OSL’s most important services. Its asset base includes 94 boats and 13 vessels owned by other parties. For the fiscal year 2020-21, the company’s consolidated revenue was Rs 622.10 crore.

The existing clientele has been with OSL for a long time, with contracts spanning 5 to 20 years (the average length of contracts is approximately seven years). Furthermore, the contracts are on a take-or-pay basis, ensuring OSL’s business model’s stability.

Adani buys Ocean Sparkle in Rs 1,500cr dealThe firm serves all of India’s main ports, 15 smaller ports, and three LNG terminals. Through operations in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen, and Africa, it has extensive expertise in global marine services.

OSL has an enterprise value of Rs 1,700 crore and Rs 300 crore in free cash.

OSL’s credit grade reflects its appealing capital structure, high-quality activities, and stable cash flows (AA- by ICRA).

In FY22, the company expects to generate Rs 600 crore in sales, Rs 310 crore in EBITDA, and Rs 135 crore in PAT. Marine Services (towage and pilotage) supplied around 92% of OSL’s overall income, with the remaining 8% coming from dredging and other offshore services combined.

Adani Harbour Services’ consolidated revenue and EBITDA are predicted to increase by 100% by FY27, to roughly Rs 5,000 crore and Rs 4,000 crore, respectively, due to operational and financial synergies.

DEAL BETWEEN ADANI AND OCEAN SPARKLE

  • Towage, pilotage, and dredging are among the company’s main operations. Ocean sparkle is a market leader, with a fleet of 94 possessor of boats and 13 owned by other parties.
  • OSL has valued Rs 1,700 crore in enterprise value, with Rs 300 crore in cash.
  • The firm was founded in 1995 by a group of maritime technocrats, with P Jairaj Kumar as Chairman and MD, and he will continue to serve on the OSL board of directors.
  • OSL has long-term partnerships with its current customers, with contracts ranging from 5 to 20 years (the average contract length is seven years).

Adani Group is paying $30 million to Myanmar military-controlled firm for  port deal, alleges report

  • Furthermore, the contracts are on a Take or Pay (TOPA) basis, ensuring OSL’s business model’s stability. The firm serves all of India’s main ports, 15 smaller ports, and three LNG terminals.
  • OSL has established and deployed a workforce of 1,800 people throughout India. Through its activities in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen, and Africa, the company has extensive expertise in worldwide marine services.

Financials and Valuation

OSL’s credit grade reflects its appealing capital structure, high-quality activities, and stable cash flows (AA- by ICRA). In FY22, the company expects sales of INR 600 crore, EBITDA of INR 310 crore, and PAT of INR 135 crore. Marine Services (towage and pilotage) supplied around 92 per cent of OSL’s overall income, with dredging and other offshore services accounting for the remaining 8%.

The ratio of net debt to EBITDA is less than one. The purchase of OSL by APSEZ was completed at an excellent EV/ FY23E EBITDA ratio of 5.7x. Adani Harbour Services’ consolidated revenue and EBITDA are predicted to increase by 100% by FY27, to roughly INR 5,000 Cr and INR 4,000 Cr, respectively, due to operational and financial synergies.

The reason behind this purchase

  • Ocean Sparkle is a market leader in India’s entire port operations and management industry. “Through seamless integration of all services, we provide our customers with a single point of responsibility, resulting in the successful execution of maritime operations,” the business stated in a video posted on its website. Towage, pilotage, and dredging are among Ocean Sparkle’s most important services.
  • According to the statement, it has a presence in all major ports, 15 smaller ports, and all three LNG terminals in India. P Jairaj Kumar is the chairman and managing director of Ocean Sparkle, founded in 1995 by a group of marine technocrats.

Sebi keeps Adani Wilmar's Rs 4,500-cr IPO in abeyance - The Week

  • Ocean Sparkle’s asset base includes 94 boats and 13 vessels owned by other parties. It has an enterprise value of Rs 1,700 crore and free cash of Rs 300 crore.
  • Through its activities in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen, and Africa, Ocean Sparkle has gained expertise in worldwide marine service.
  • Ocean Sparkle has received an AA credit rating from ICRA. “In FY22, the business expects to generate Rs 600 crore in sales, Rs 310 crore in EBITDA, and Rs 135 crore in profit after tax.” “Marine services (towage and pilotage) supplied about 92 per cent of overall income while dredging and other offshore services together contributed the remaining 8%,” according to ICRA.

Edited by Prakriti Arora

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments

%d bloggers like this: