Allcargo (AGLL) has, in FY20, participated in a contract with Blackstone realty Asia city (BRE) to transfer 90% stake in its portfolio of 5 mn sq.ft. (carried out plan with 6 subsidiaries till date) on finished and rented basis, together with extra greenfield advancement tasks. Investment made by BRE so far is Rs 3.37bn (like FY20, with ~ Rs 89.3mn as equity). In FY21 AGLL has actually gotten Rs 605mn from Madanhatti Logistics and Industrial Park (MLIP), Venktpura Logistics & Industrial Parks (VLIP) and Allcargo Logistics and Industrial Park (ALIP) towards release of its previous held equity interests. The building expense moneyed by AGLL continues to be paid back by method of re-financing through lease rental marking down centers that are well served by the rental invoices. AGLL still holds managing stake over Malur Logistics and Industrial Parks (MLP) and VLIP.
Management thinks that in spite of Covid-caused hold-ups, they will be able to total the handle BRE within the (modified) concurred timelines. We downgrade AGLL to HOLD from ADD post ~80% runup in previous 6 months.
Details of the deal with BRE. AGLL carried out arrangements with its 6 completely owned subsidiaries — MLP, ALIP, MLIP, VLIP, Kalina Warehousing (KW) and Panvel Warehousing (PW) together with BRE. Business transfer arrangements have actually been performed with ALIP, MLIP, MLP and VLIP moving ~ Rs 4.08bn of warehousing properties of AGLL through depression sale. Total organization transfer factor to consider transformed to debentures for these 4 entities is Rs 4.14bn (like FY20).
Update on warehousing. AGLL has actually currently finished its very first stage of warehousing advancements throughout the nation and presently has functional warehousing area in excess of 4 mn sq.ft with more lease dedications taking the overall developed/under-development area to 5.7 mn. sq. ft. AGLL has extra tasks that remain in preparing phase with an advancement capacity of over 3 mn sq. ft.
BRE’s put alternative now valued at Rs 36.4mn from Rs 30.2mn YoY. If particular conditions are not pleased within a set timeframe (at first ~12 months ending in 13th Jan 2021; FY21 yearly report mentions it has actually been extended even more however doesn’t define a timeline), AGLL will have to buyback the debentures and the equity cash which BRE has actually invested together with 16% interest. AGLL has actually valued BRE’s ‘put option’ assessment from an independent valuer and has actually designated the suitable possibility to it based on its finest quote and came to a worth of Rs 36.4mn, up ~ Rs 6mn YoY.
Shares of 8 subsidiaries promised in favour of BRE most likely versus the debentures that BRE has actually extended based on FY20 yearly report; no more information shared in FY21 yearly report. FY20 yearly report highlighted that shares of Allcargo Inland personal park, Allcargo multimodal, KW, PW, MLIP, ALIP, MLP, and VLIP has actually all been promised in favour of BRE. So apart from the 6 completely owned subsidiaries with whom arrangement has actually been carried out, 2 extra subsidiaries shares were promised — Allcargo inland personal park and Allcargo multimodal.