Allcargo Logistics concludes prior agreement, Blackstone now owns 90 percent of its logistics parks

In line with a prior agreement Allcargo Logistics on Thursday concluded the deal to sell a part of its logistics parks business to global private equity giant Blackstone, making the company cash positive. Allcargo Logistics has consummated the agreement with the signing of the share purchase agreement (SPA).

Blackstone as part of the agreement will own 90 percent of these logistics parks while the remaining 10 percent will continue to be with Allcargo Logistics and will get demerged into TransIndia Realty under the ongoing scheme of demerger, the company said in a statement.

 “Allcargo will have cash infusion, conversion of OCDs, and eliminate debt for the transferred entity, creating an impact of over Rs 400 crore on the net debt. With the closure of the transaction, Allcargo’s consolidated net debt will fall below zero and the company becomes cash positive,” it said.

 5.5 million square feet of Grade A logistics parks have been built by the company across the National Capital Region (NCR) Delhi, Bengaluru, Hyderabad, and JNPT in the Mumbai Metropolitan Region (Mumbai).

 Under the transaction, the assets in Bengaluru and Hyderabad along with the parks in Goa will get transferred to Blackstone, while NCR, Hosur, and MMR region will continue with the company, Allcargo said.

 Post-demerger, the new real estate company also has projects in the planning stage for another approximately 8.6-million square feet of space, which will be pursued in the new entity on its balance sheet, the company added.

 “The agreement with Blackstone brings closure to a well-planned strategic initiative and demonstrates our commitment towards stakeholders, especially on the successful completion of marquee warehouses, leased to top tier customers,” it noted.

 The deal’s closure is aligned with Allcargo’s corporate strategy of being an asset-light organization and will enhance the returns on capital employed, the company said.

“We will continue to move forward with our broader strategic mandate of being an asset-light digital company with huge potential to grow in India as well as globally at Allcargo Level, while the real estate business will find new vision and progress under the soon-to-be demerged entity TransIndia Realty,”

Shashi Kiran Shetty, founder, and Chairman of Allcargo Group.

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