Deals

" We were actively looking for assets in Australia, South Africa, Indonesia and Mozambique. The exclusive mandate only for Australia was given to Singhi Advisors, who not only showed us about 15 different alternatives, but also gave us end-to-end logistics solutions. They carried out the detailed study of the tenement as well as the logistics details and further transaction closure with the seller. We are very happy with their approach and quality of work and would wish them all the success in future."
Harsh V. Mishra, President - Corporate Planning, Adani Enterprises

Completion Date
August 2010

Transaction Type
Acquisition

Transaction Value
$2700 million

Lead Partner
Rajeev Phanse
Telephone + 91 22 6634 6666

Background
Singhi Advisors acted on behlaf of Adani Enterprises, the flagship company of port to power conglomerate Adani Group. The Adani Enterprises is the largest merchant importer of the thermal coal in India, having imported 36 mn MT in FY10 with the target of 50 mn MT in FY11. They import almost 2/3rd of all the coal imports into India. As per their estimate, India’s imported coal requirement would exceed 200 mn MT by 2015, with Adani’s target to retain 60% of this market share.

In addition to the trading operations, they are also targeting 20,000 MW coal based power plants by 2020, which will have coal requirement exceeding 70 mn MTPA, majority of which would be imported.

By acquiring Linc's Galilee coal tenement, having estimated reserves of 8 billion tones, Adani would target the production of over 50 mn MT of coal per year from 2014 after development of mines and other infrastructure, including a 500km of rail track over the next 4 years.

The acquisition is the largest coal asset acquisition by an Indian firm, 5th largest acquistion by an Indian firm and 7th largest M&A deal involving an Indian entity.

What Difference Did We Make?
Singhi proposed Adani to not only acquire coal assets in Australia, but also invest in end-to-end logistics, so as to reduce the effective cost of coal and to get assured supply. Singhi Advisors were given buy-side mandate along with a retainership by Adani for identification, assessment and deal closure for thermal coal assets in Australia. Our work involved identifying suitable targets, studing the viability based on the mining cost, various on-site costs (local costs of OB removal, coal getting, local haulage within mine, crushing, washing, administration, etc.), logistics costs including road, train and port charges to assess acquirability, 'as is pricing', and suggest suitable deal structure.