Aegis and Vopak to create terminal joint venture in India
Aegis and Vopak are joining forces in India. The new partnership, Aegis Vopak Terminals Ltd, will operate a network of eight terminals that are located in five strategic ports along the east and west coast of India.
The enterprise value for Vopak’s shareholding in the joint ventures is EUR185 million (USD218 million), plus EUR15 million (USD17 million), depending on the fulfilment of certain CP’s. Vopak and Aegis have arranged financing of EUR153 million (USD180 million) in the joint ventures.
With a total capacity of around 960 thousand cubic metre (cbm), the partnership will become one of the largest independent tank storage companies for liquefied petroleum gas (LPG) and chemicals in India. The Indian government has earmarked LPG to provide cleaner and safe cooking fuels for households.
Aegis Group plays a key role in India’s downstream oil and gas sector, and its flagship company, Aegis Logistics Limited, is India’s leading oil, gas, and chemical logistics company.
This investment is another step for Vopak, the world’s leading independent tank storage company, towards its strategy to allocate capital to grow in gas markets.
“This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG [liquefied natural gas] and other energy projects including renewables in partnership with the world’s leading independent tank storage company,” said Raj Chandaria, chairman of Aegis Logistics Ltd.
“This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next 10 years in line with the new joint ventures’ and India’s ambition for LPG,” said Eelco Hoekstra, chairman of the Executive Board and CEO of Royal Vopak. “We are very excited about this new partnership. Aegis is a reputed local partner with a ready organization and proven track record of conceiving and executing tank farm assets in strategic locations along the Indian coastline.”
The transaction is expected to close in early 2022, subject to customary closing conditions.
The transaction entails two separate legal entities that Vopak will simultaneously buy into on the basis of joint control:
- The Aegis Vopak Terminals Ltd entity, in which Vopak will acquire a 49% shareholding. Vopak’s existing CRL terminal entity in Kandla will become a wholly owned subsidiary of Aegis Vopak Terminals Ltd.
Aegis’ network of terminal assets at five different locations in Kandla, Pipavav, Mangalore, Kochi and Haldia, covering the west and east coast of India will be added to the joint venture asset base.
- The Hindustan Aegis LPG Ltd entity, in which Vopak will acquire a 24% shareholding. This is currently a joint venture between Aegis and Itochu. After the transaction, Aegis will own 51% and Itochu will continue to hold 25%.