Adani stocks soar on report of Aussie coal terminal sale
12 Aug 2014
Shares of Adani Enterprise soared close to 5 percent in early Monday morning trade on reports of the company planning to sell their Abbot Point coal terminal in Australia. In fact, the two other listed Adani group companies — Adani Power and Adani Ports — too were up between 1.5 percent and 2 percent.
According to a Business Standard report, the change in the group’s strategy is mainly due to slowing coal traffic, apart from falling prices — from USD 120 a tonne to USD 70 a tonne three years ago. The report said the sale could happen close to the original acquisition price of USD 2 billion.
Adani’s Australia plans have been marred by delays due to environmental concerns. Abbot Point is facing a legal challenge from green groups fighting an expansion that will dredge up 3 million cubic metres of sand to be dumped near the Great Barrier Reef. However, recently the Australian government had approved Gujarat-based Adani Mining Pty Ltd's USD 15.5 billion Carmichael coal and rail project in Queensland, subject to strict conditions to protect groundwater.
The coal from the Carmichael mine was expected to be transported via a 400-km railway line to Abbot Port and from there it will be exported to India. Post Q2FY14 results, the Adani management had indicated that in light of subdued imported coal prices, its Australian capex plans are currently on hold and no material capex is expected at least in FY14. It said the coal production may commence in FY18-19. The rally in the group's flagship company shares was also on the back of strong earnings. Adani Enterprises reported a consolidated net profit at Rs 557 crore for the quarter ended June 30, 2014 (Q1FY15), on back of higher sales volume in power business. The company had a net loss of Rs 278 crore in the same quarter previous fiscal.
Source: Moneycontrol.com