Mundra Port & SEZ asked to convert bonds into equity

ADANIS, the promoters of Mundra Port & SEZ (MPSEZ) have been asked to convert the US$100 million in bonds into equity at the request of the Government of Singapore's Investment Corporation (GIC) and a UK-based private equity firm, 3i.

Valuations of the company surged to $3.5 billion from the earlier $1 billion within one year after a major restructuring, reported India's Economic Times. It said an IPO of MPSEZ is now expected to follow.

"The two private equity investors have asked us to convert bonds into equity. The conversion price is yet to be arrived at, and it will be done in consultation with them," said a senior financial officer from MPSEZ in the report.

It said Mundra Port & SEZ, on India's west coast, has filed a draft prospectus with Sebi for India's first IPO from a private port owner.

The deepwater port of Mundra is equipped with two container terminals, dry bulk and liquid bulk berths, warehousing facilities and various industrial activities under the SEZ. The port is within short distance of the Middle East, Pakistan and northern India markets.

MPSEZ is both the operating and holding company for three ports projects of Mundra, Dahej and Dholera, and the massive SEZ at Mundra.

The Adani group is also said to be investing in inland container depot and freight train businesses. The French shipping line CMA CGM is buying a 26 per cent stake in Adani Logistics, a wholly-owned subsidiary of MPSEZ.

Sources said CMA CGM is also interested in investing in the second container terminal. The first terminal is owned by DP World, which has a first right of refusal on the second terminal. Adani owns Mundra port under Gujarat's build, operate and transfer policy.