Adani Ports had a deal with Gangavaram. The deal was done under the All Share deal, but looking at the Myanmar military connection of the Adani Group, the promoters are demanding a share in the cash instead of the shares.
Gautam Adani, the second richest man in the country, may soon get a shock of 1954 crores. Actually, the deal of Adani Port with Gangavaram Port seems to be in danger. The reason for this is the Myanmar military connection of the Adani Group. The promoters of partner group Gangavaram have demanded cash for half of their stake in Adani Ports, instead of shares in the project due to fears of foreign investment in the project. This may increase Gautam Adani’s difficulties.
After the deal with the Adani Group, the promoter ports are negotiating a re-sale. They want to increase the cash component of this deal. According to Moneycontrol reports, the DVS Raju family, which holds 58.1 per cent stake in Gangavaram, says that they need to pay half of their share in cash and not shares in the partnership. Let me tell you that this deal was first decided under the All Share Deal.
Military connection may affect valuation
The Adani group has already faced severe criticism from the people over the Myanmar military connection. In such a situation, the deal could be jeopardized by the revolt of the promoter company. The promoters of Gangavaram Port are fearing that valuations may be affected due to Adani’s ties to the Myanmar military. He feels that some Scandanavian investors have sold their holdings in Adani Port due to ESG (concerns related to the environment, social and corporate governance) concerns related to the company.
Bought stake in 1954 crores
A promoter firm of Adani Port bought a 31.5 per cent stake in Gangavaram Port from Warburg Pincus for Rs 1954 crore. Apart from this, on 23 March, Adani Port had entered into a deal to acquire Raju Family’s stake in Gangavaram Port for Rs 3,604 crore. Gangavaram was valued at Rs 120 per share for both these deals.