Allcargo logistics limited has completed the deal to sell a portion of its logistics parks business to global private equity firm Blackstone, in order to make the company cash positive. According to Allcargo Logistics, this is in line with the agreement signed earlier, which has now been consummated with the completion of the SPA (Share Purchase Agreement). According to the agreement, Blackstone will hold 90% of these logistics parks while the remaining 10% will continue to be with Allcargo logistics company and will get demerged into TransIndia Realty as part of an ongoing demerger scheme.
Allcargo logistics will have a cash infusion, conversion of OCDs and elimination of debt for transferred the entity, creating an impact of over Rs 400 cr on the net debt. Allcargo will become cash positive after the transaction is completed and its consolidated net debt would drop below zero. Allcargo company has built 5.5 million sq ft of Grade A logistics parks across the Delhi NCR, Hyderabad, Bangalore and JNPT (Jawaharlal Nehru Port Trust) in Mumbai metropolitan region.
Blackstone will hold 90% of these logistics parks while the remaining 10% will continue to be with Allcargo logistics company
Under this deal, the parks in Goa and the business’s assets in Hyderabad and Bangalore would be transferred, while the company will keep its presence in the NCR, Hosur, and MMR regions. After the demerger, the new real estate company also has projects in the planning stage for an additional 8.6 million sq ft of area, which will be pursued in the new firm on its balance sheet. The deal with Blackstone brings closure to a well-planned strategic project and demonstrates our commitment towards stakeholders, especially on the successful completion of marquee warehouses, leased to exclusive customers.
The deal with Blackstone brings closure to a well-planned strategic project
This closure of the deal also complies with the company’s corporate strategy of operating as an Allcargo logistics organisation with few assets, which will increase returns on invested capital. Allcargo group founder and chairman, Shashi Kiran Shetty said that they will continue to move forward with their broad strategic mandate of being an asset-light digital company with a huge potential to grow in India as well as worldwide at Allcargo level, while the real-estate business will find new vision and progress under the soon-to-be demerged firm TransIndia Realty.