Dubai Port World (DPW) has received ‘no objection’ approval from the Indian government to the proposed change in shareholding in the company’s container terminal projects in major ports.
Following the approval, DPW will be able to form an Indian holding company, called Hindustan Ports (HPPL), with exclusive asset portfolio to operate and manage the terminal operations at the current major ports subject to certain conditions.
According to the condition, the net worth of the new company after acquisition of the shares of the project SPVs shall be higher than $80m.
The latest decision is expected to encourage foreign direct investment in the country and private sector participation in the port sector.
DPW was planning to restructure its Indian assets in order to consolidate the ownership of its port infrastructure in the country into a single holding company, which will take over all liabilities of the company’s current subsidiaries formed according to the concession agreements.
Following the formation of the new company, which has been cleared by the Foreign Investment Promotion Board (FIPB), the ultimate beneficiary and the ultimate legal and beneficial ownership will continue to remain with DPW.
With the proposed company, DPW expects to expand its capital base and help fetching fresh investments in ports and logistics infrastructure in India, while, allowing competent access of finance and bring in latest technology in port operation.
The Port Authorities in India will also benefit from the government decision, since it has to deal with only one registered company of DPW.
DPW, which owns port terminals across the globe, currently has a portfolio of over 65 marine terminals across six continents, including new developments underway in India, Africa, Europe and the Middle East.