To acquire a majority stake in Karaikal Port in Tamil Nau, India's second largest private sector port and terminal company Essar Ports and US private equity giant TPG Capital are in the fray to acquire a majority stake in Karaikal Port, say media reports. The port is a subsidiary of debt-ridden Chennai based Marg Group.
Sources said that the talks with the two suitors are at a preliminary stage and may or may not conclude into a deal.
The promoters of the Marg Group are looking to substantially reduce their debt exposure of around Rs 1,000 crore and are expecting an enterprise value in excess of Rs 3,000 crore. The plan is to use a part of the proceeds to settle Karaikal Port's debt of Rs 1,600 crore. The balance would be divided between Marg promoters and the private equity investors of Karaikal Port.