Tata Steel, L&T pledge Dhamra Port's 51% stake
Tata Steel and Larsen & Toubro have pledged 51 percent stake of their joint venture, Dhamra Port Company (DPCL).
New Delhi: Tata Steel and Larsen & Toubro have pledged 51 percent stake of their joint venture, Dhamra Port Company (DPCL).
"The promoters' combined investments in DPCL representing 51 percent of the port's paid-up equity share capital are pledged with IDBI Trusteeship Services," Tata Steel, which has 50 percent stake in DPCL, has said in its annual report.
The financial details of the pledge were not disclosed.
IDBI Trusteeship Services (ITSL), which claims to be the country's largest trusteeship firm, is jointly promoted by IDBI Bank, Life Insurance Corporation and GIC of India.
Generally, promoters' pledge their shares as a security to borrow money from financial institutions. The funds so raised could be used for either personal needs or business expansion.
Meanwhile, in its annual report, L&T, which owns the rest 50 percent stake in DPCL, said the Port, in its first year of operation, suffered a loss of Rs 458 crore on high interest cost and amortisation.
"DPCL reported a total income of Rs 198 crore for FY'12 with a net loss of Rs 458 crore. As this was the first year of operations for the port, it had high amortisation and interest costs along with initial ramp-up in traffic," L&T said.
Since commencing operations in May last year, the port handled a total of 5.1 million tonnes cargo. Presently, two berths of the port have been fully developed.
The two home-grown corporate giants joined hands to form a 50:50 joint venture for setting up a deep water all weather port at Dhamra, under Build-Own-Operate-Share-Transfer (BOOST) model with a concession awarded by the Odisha Government for a period of 34 years with an option for renewal.
The total cost of DPCL is around Rs 3,600 crore.
Situated between Haldia and Paradeep, DPCL is one of the deepest ports of India with a depth of 18 metres, which can accommodate super cape-size vessels up to 180,000 DWT.
The immediate hinterland of the port is rich in mineral resources with reserves of iron ore, thermal coal, nickel, bauxite and chromite, all of which have brisk export demand.
The area is also home to some of the largest steel producers in India who import coking coal to meet their requirements.