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Aegis Logistics and Rotterdam headquartered, Vopak, announced that the companies have decided to join forces in India with the aim to grow together in the LPG, chemicals storage and handling business.
The new partnership, Aegis Vopak Terminals (AVTL), will operate a network of terminals that are currently located in five strategic ports along the east and west coast of India. With a total capacity of around 960,000 m3, 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.
The transaction is expected to close early 2022, subject to customary closing conditions.
Joint venture structure
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%
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 JV asset base.
● The Hindustan Aegis LPG 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%.
● Aegis will continue to retain 100% ownership of its Mumbai Liquid and LPG terminals and its LPG retailing business.
The enterprise value for Vopak's shareholding in the joint ventures will amount to €200million. In addition to a net consideration at closing of € 115 million, Vopak and Aegis have agreed the following: a payment of a minimum € 18m and up to a maximum of € 40m payable to Aegis via a call and/or put option in 2025.
Aegis will receive a total gross pre-tax cash proceeds from the sale of up to Rs 2,766 crore.
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