A consortium of Adani Ports and Special Economic Zone Ltd (APSEZ), the country’s largest integrated transport utility, and Israel's Gadot Group has won the tender for privatising Israel’s second largest port of Haifa.
The winning consortium completed an intensely competitive two-year-long tendering process to acquire 100 per cent shares in Haifa Port Co. The concession period of the project expires in 2054.
Expressing his delight at securing the deal, whole-time director and CEO of APSEZ, Karan Adani, said that it was part of one of the many steps they were taking “to transform APSEZ into a global transport utility that will include logistics and warehousing.”
“This win is strategic for us from several dimensions. It gives us a much larger presence in Israel, one of India’s most strategic partners, with whom the Adani Group has been working for six long years to build a network of relationships across several industries,” noted Adani in a company statement.
“The length of the lease and the growth that we anticipate in the Israel economy, as well as the surrounding regions, means we are well positioned to invest to build one of the best ports in this region,” remarked Gadot Group CEO, Opher Linchevski.
APSEZ is looking at developing strategic trade lanes between its ports in India and Haifa to facilitate bilateral trade, diversify port cargo and leverage its expertise in the business to increase operational efficiencies at the facility.
Strategic development for India
Following the inking of the Abraham Accords in 2020 relations between Israel and the Gulf states have improved significantly, with expectations of peace paving the way for rapid economic growth in the region. APSEZ anticipates the Jewish state to serve as a conduit to Europe and the Middle East in the long term.
The consortium had made an offer of Israeli new shekel 4.1 billion, which is equivalent to $1.18 billion. Adani Ports and Gadot Group’s shareholding in the consortium is in a 70:30 ratio. APSEZ has said that it will fund its portion of the investment through internal accruals.
“With this acquisition, Adani Port has further consolidated its position in the infrastructure space at a global level. It is also an important strategic and geopolitical development for India,” partner at the law firm, DSK Legal, Ajay Shaw told Business Today.
Ties between New Delhi and Jerusalem have become more intimate since Prime Minister Narendra Modi’s election in 2014. From $200 million in 1992 trade had reached $6.35 billion – excluding defence – during the period April 2021-January 2022, with the balance of trade being in India’s favour.
India is presently Israel’s third largest trading partner in Asia and seventh largest globally. Both countries are also in talks for a Free Trade Agreement (FTA).
India, which has a long history of seafaring, is looking at establishing new shipping lanes in the 21st century amid a rapidly changing geopolitical environment.
Investors reacted positively to the announcement, with the APSEZ stock closing at Rs 729.70, up 0.62 per cent from the previous day’s close at Rs 725.20 on the benchmark BSE index on Friday.
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