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Tata Steel to pick up key stake in CPDPL

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Source: Economics Times
Thursday, January 26, 2017
Tata Steel has agreed to acquire majority stake in Creative Port Development Private Ltd as part of its move to develop the proposed Subarnarekha port in Odisha's Balasore district, which will help ease logistics challenges for some of its plants.
 
Tata Steel on Wednesday said it has executed definitive agreements with Creative Port Development (CPDPL) and its promoters for developing Subarnarekha Port at Chaumukh village. While Tata Steel did not specify the investment for the project, it said a detailed engineering study will soon be taken up to arrive at the configuration and the project cost will be undertaken soon.
 
As per the agreements, Tata Steel will acquire majority equity stake in CPDPL, and the port development is envisaged through a wholly owned subsidiary, Subarnarekha Port Private Limited (SPPL). The acquisition and development is subject to certain conditions precedent, detailed technical assessments and financial closure, the statement said.
 
“The investment to develop the Subarnarekha Port will address the strategic needs of Tata Steel in the future,” said Koushik Chatterjee, group executive director (finance & corporate) at Tata Steel. “The location of the proposed port makes it attractive to structurally enhance the competitive position of our Indian operations."
 
CPDPL, promoted by technopreneurs Ramani Ramaswamy and Ramaswamy Rangarajan, had entered into a concession agreement with Odisha government in January 2008 to develop the proposed Subarnarekha port as an all-weather deep-draft facility.
 
Chatterjee said Tata Steel would work together with the current promoters to make Subarnarekha an efficient port. “With the growth envisaged in Kalinganagar in the future, our offtake through Dhamra is also slated to increase,” he said.
 
TV Narendran, managing director at Tata Steel India, said, “As Tata Steel grows in India in the future, securing competitive logistics solution is a key aspect in de-risking our in-bound and out-bound supply chain.”
 
For Tata steel this is the second entry into port development in Odisha. Earlier it had promoted Dhamra port along with L&T, to facilitate movement of material for its plant at Kalinganagar. However, the two partners divested their stake in Dhamra port in 2014 to Adani group for Rs 5,500 crore.

 



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