July 19, 2021 [TradeArabia] -Aegis and Vopak have decided to join forces in India with the aim to grow together in the LPG and chemicals storage and handling business.
The new partnership Aegis Vopak Terminals will operate a network of 8 terminals that are located in five strategic ports along the east and west coast of India. With a total capacity of around 960 thousand cbm, the partnership will become one of the largest independent tank storage companies for LPG and chemicals in India. LPG is earmarked by the Indian government to provide cleaner and safe cooking fuels for households.
The partnership is well positioned for further growth, which targets mainly LPG and also chemicals and industrial terminal opportunities. This investment is another step for Vopak 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 and other energy projects including renewables in partnership with the world’s leading independent tank storage company. We expect the deal to be significantly earnings enhancing for Aegis shareholders due to the deployment into growth opportunities of the combined financial firepower of the two groups and management in the terminals business.” said Raj Chandaria, Chairman of Aegis Logistics.
“This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next ten 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 for 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.”
This transaction entails two separate legal entities that Vopak will simultaneously buy into on the basis of joint control:
• The Aegis Vopak Terminals entity, in which Vopak will acquire a 49 per cent shareholding. Vopak’s existing CRL terminal entity in Kandla will become a wholly owned subsidiary of Aegis Vopak Terminals.
Aegis’ network of terminal assets at 5 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 entity, in which Vopak will acquire a 24 per cent shareholding. This is currently a joint venture between Aegis and Itochu. After the transaction Aegis will own 51 per cent and Itochu will continue to hold 25 per cent.
The transaction is expected to close early 2022, subject to customary closing conditions.
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