Aegis and Vopak have decided to join forces in India with the aim to grow together in the LPG, chemicals storage and handling business. 

The new partnership, Aegis Vopak Terminals Ltd (AVTL), will operate a network of terminals that are currently located in five strategic ports along the east and west coast of India. With a total capacity of around 960,000 cubic meter, the partnership will become one of the

largest independent tank storage companies for LPG and chemicals in India. 

The partnership is well positioned for further growth, which targets mainly LPG and also chemicals and industrial terminal opportunities. This investment is another step for Vopak towards its strategy to allocate capital to grow in gas markets. 

“This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects including renewables, in partnership with the world’s leading independent tank storage company. We expect the deal to be significantly earnings enhancing for Aegis shareholders due to the deployment into growth opportunities of the combined financial firepower of the two groups and management in the terminals business,” said Raj Chandaria, Chairman, Aegis Logistics Limited. 

"This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next ten years in line with the new joint ventures and India’s ambition for LPG,” said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak. 

“We are very excited for this new partnership. Aegis is a reputed local partner with a ready organization and proven track record of conceiving and executing tank farm assets in strategic locations along the Indian coastline," added Hoekstra. 

The transaction is expected to close early 2022, subject to customary closing conditions. 

This transaction entails two separate legal entities that Vopak will simultaneously buy into on the basis of joint control. The Aegis Vopak Terminals Limited entity, in which Vopak will acquire a 49% shareholding. Vopak's existing CRL terminal entity in Kandla will become a wholly owned subsidiary of Aegis Vopak Terminals Limited. Aegis’ network of terminal assets at 5 different locations in Kandla, Pipavav, Mangalore, Kochi, and Haldia covering the West and East coast of India will be added to the JV asset base. 

The Hindustan Aegis LPG Limited entity, in which Vopak will acquire a 24% shareholding. This is currently a joint venture between Aegis and Itochu. After the transaction Aegis will own 51% and Itochu will continue to hold 25%. 

Aegis will continue to retain 100% ownership of its Mumbai Liquid and LPG terminals and its LPG retailing business. 

The enterprise value for Vopak’s shareholding in the joint ventures will amount to €200 million. In addition to a net consideration at closing of €115 million, Vopak and Aegis have agreed the following: a payment of a minimum €18m and up to a maximum of €40m payable to Aegis via a call and/or put option in 2025. 

Aegis will receive a total gross pre-tax cash proceeds from the sale of up to Rs. 2,766 crores.