Global port operator DP World Ltd has closed a deal on Thursday to buy three units of Dubai-based Transworld Group promoted by Indian businessman Ramesh Ramakrishnan.
The acquisition plan, announced last August, will help the Dubai government-owned firm bolster its Indian and global logistics play as part of a strategy to transform from a pure play container terminal operator into an integrated supply chain solutions provider.
“Final approvals from the relevant authorities have been obtained and the transaction has been closed on July 1,” Ramesh Ramakrishnan, the Chairman of Transworld Group and Shreyas Shipping and Logistics Ltd said.
DP World’s majority-owned subsidiary Unifeeder ISC FZCO has acquired 100 per cent of Avana Logistek Limited (including its subsidiary Avana Global FZCO) and Transworld Feeders Private Ltd (the containerised Indian coastal and EXIM feeder shipping operations of Mumbai-listed Shreyas Shipping & Logistics Ltd, excluding its container vessels and bulk ship operations).
‘Indirect buy’
The deal also includes the indirect acquisition of 100 per cent of Transworld Shipping Agencies Private Ltd (TSAPL) following Unifeeder’s acquisition of Transworld Feeders FZCO which holds 100 per cent of Transworld Shipping Agencies.
Container feedering (short sea shipping) and inland logistics are at the heart of DP World’s diversification strategy to provide end-to-end solutions to customers.
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Transworld Feeders FZCO and Avana Global FZCO are independent feeder and Non-Vessel Owning Common Carriers operators, offering container feedering services and regional trade solutions connecting a wide range of ports in West Asia, Indian Subcontinent and the Far East.
The hub port at Jebel Ali (UAE) run by DP World plays a pivotal role for a large part of these services.
Transworld Feeders Pvt Ltd and Avana Logistek Limited have a comprehensive coverage of all main ports, terminals and inland destinations in India. Avana Logistek also provides first mile and last mile delivery solutions within the Indian market.
As a feeder operator with a volume of 1.2 million twenty-foot equivalent units (TEUs) a year, Transworld fits DP World’s strategy, said a shipping industry expert.
DP World runs six terminals at Mundra, Jawaharlal Nehru Port Trust (2 terminals), Chennai, Kochi and Vizag with a combined capacity of over 6 million TEUs accounting for about 30 per cent of India’s annual container volumes.
Acquisitions
DP World has also set up Hindustan Infralog Private Limited (HIPL), a joint venture with India’s National Investment and Infrastructure Fund Ltd (NIIF) to invest $3 billion of equity to acquire assets and develop projects in ports, terminals, logistics, transportation and related sectors.
In 2018, the JV acquired multi-modal logistics firm Continental Warehousing Corporation (Nhava Seva) Ltd (CWCNSL) and followed it up by acquiring KRIBCHO Infrastructure Limited (KRIL), an integrated multi-modal logistics operator in 2019.
Following the deal, Shreyas Shipping, the Indian flagged vessel owning unit of Transworld Group, has struck a long-term container ship chartering arrangement with Transworld Feeders.
This will also enable Shreyas to indirectly participate in the upside of the growth in the coastal trade market as its charter pay-outs will be performance linked to the earnings of Transworld Feeders.
The framework chartering agreement with Unifeeder is also non-exclusive, which means that Shreyas reserves the right to charter vessels to third parties who can offer terms more beneficial to the fleet owner.