NEW DELHI: The Kerala government has received a proposal from Adani Vizhinjam Port Private Ltd (AVPPL) seeking approval to transfer a 49 percent equity stake to Geneva-headquartered Mediterranean Shipping Company (MSC), but no such proposal has been received by the Union government, Minister of Ports, Shipping and Waterways Shri Sarbananda Sonowal informed the Lok Sabha on August 7.
“The Government of Kerala has informed that it has received a proposal from AVPPL for prior approval of the Concessioning Authority, i.e. the Government of Kerala, for transfer of 49 percent equity in the company (AVPPL),” Sonowal said in a written reply.
In June, Adani Ports and Special Economic Zone (APSEZ) announced that Mediterranean Shipping Company, the world’s largest container shipping company, would acquire a 49 percent stake in AVPPL in a transaction valued at around $1.4 billion.
Shri Sonowal said the Vizhinjam International Seaport is a non-major port being developed by the Government of Kerala under the public-private partnership (PPP) model through a concession agreement with AVPPL.
He noted that non-major ports fall under the administrative control of state governments.
“Ports other than major ports, also referred to as non-major or minor ports, are under the administrative control of the respective State Governments, and their development falls within the jurisdiction and responsibility of the States,” the minister said.
On July 1, Kerala Chief Minister V.D. Satheesan said the state would examine the proposed sale of a 49 percent stake in AVPPL to MSC, reiterating that ownership of the Vizhinjam port concessionaire cannot change without the prior approval of the state government.
Citing Clause 5.3 of the concession agreement, he said: “The concessionaire shall not undertake or permit any change in ownership without the prior approval of the Authority.” Under the agreement, the Authority refers to the Government of Kerala.
The Chief Minister also said that under the Companies Act, the transfer of more than 25 percent equity constitutes a change in ownership, and therefore the proposed transaction cannot proceed without the state’s prior approval.
