Allcargo Signs SPA for Logistics Parks Deal, completes deleveraging plan

Allcargo Logistics Ltd, (BSE: 532749) (NSE: ALLCARGO), an Allcargo Group company, an India-born global logistics conglomerate, has announced the conclusion of its sale of a part of its logistics parks portfolio to global private equity investor Blackstone Group ("Blackstone") (NYSE:BX). This is in line with the agreement signed earlier, which has now been consummated with signing of Share Purchase Agreement (SPA). Allcargo will have cash infusion, conversion of OCDs and eliminate debt for transferred entity creating an impact of over ?400 cr on the net debt. With the closure of the transaction, Allcargo's consolidated net debt will fall below zero and company becomes cash positive. This closure also aligns with the company's corporate strategy of being an asset-light organization at Allcargo Logisticslevel and will enhance the returns on capital employed. Additionally, credit ratings agency CRISIL has accredited Allcargo in its CRISIL A1 category with double A stable ratings as well as double A minusratings watch with developing implications for its long term facilities and A1 Category positive ratings for its short term facilities thereby incrementally improving the long-term financial standing of the company.

Blackstone will own 90% of these logistics parks and 10% will continue to be with Allcargo Logistics and will get demerged into TransIndia Realty under the ongoing scheme of demerger. Allcargo has built 5.5 million square feet of Grade A logistics parks across the National Capital Region (NCR) Delhi, Bengaluru, Hyderabad and JNPT in MMR (Mumbai). The assets in Bengaluru and Hyderabad along with the parks in Goa will get transferred under this transaction, while NCR, Hosur and MMR region will continue with the company. Post demerger, the new real estate company also has projectsin the planning stage for another approx. 8.6 million square feet, which shall be pursued in the new entity on its own balance sheet.

"The agreement with Blackstone is an exemplary milestone for us at Allcargo as it brings closure to a well-planned strategic initiative and demonstrates our commitment towards stakeholders, especially on the successful completion of marquee warehouses, leased to top tier customers. We will continue to move forward with our broader strategic mandate of being an asset-light digital company with huge potential to grow in India as well as globally at Allcargo Level, while real estate business shall find new vision and progress under the soon-to-be demerged entity 'TransIndia Realty'", said Mr. Shashi Kiran Shetty, Founder and Chairman of Allcargo Group.

Shares of Allcargo Logistics Limited was last trading in BSE at Rs. 413.75 as compared to the previous close of Rs. 419.05. The total number of shares traded during the day was 69130 in over 3995 trades.

The stock hit an intraday high of Rs. 440.00 and intraday low of 410.00. The net turnover during the day was Rs. 29465320.00.

Source : Equity Bulls

Keywords

AllcargoLogistics INE418H01029 TransportationLogistics LogisticsPark PEInvestor BlackStoneGroup