Adani Ports and Special Economic Zone Ltd said that it could abandon a Myanmar container terminal project and write down the investment if it is found to be violating sanctions imposed by the United States.
“In a scenario wherein Myanmar is classified as a sanctioned country under the Office of Foreign Assets Control (OFAC), or if OFAC opines that the project violates the current sanctions, APSEZ plans to abandon the project and write down the investments,” the company said in a filing to exchanges on Tuesday.
“The write-down will not materially impact APSEZ, as it is equivalent to about 1.3 per cent of the total assets,” Adani Ports added.
The company also said that it is in talks with US-based counsels Morrison Foerster to ensure compliance with the OFAC sanctions.
Adani Ports in May 2019 announced its intent to set up a container terminal at Yangon, Myanmar and entered through a lease agreement with the democratically elected government. Adani Ports invested $127 million in the project which provides employment to 300-350 people, Adani Ports said.
In a separate development, Adani Ports and Special Economic Zone’s (APSEZ) net profit in Mach quarter rose nearly four times to INR 1,287 crore from INR 334 crore in the same quarter last year.
Adani Ports handled highest ever container volume of 7.2 million of twenty-foot equivalent units (TEUs) during the year and achieved a market share of 41 per cent, a gain of 5 per cent. Mundra Port continues to be the largest container handling port in India and handled 5.66 million TEUs which is almost nearly one million TEUs more than JNPT.
The peak in the container growth is attributed to our strategy of partnering with top global ship liners through JVs and acquisition of container handling ports like Ennore and Krishnapatnam, Adani Ports said in a press release.
Even the United States (US) and Britain have also issued sanctions to the Myanmar Economic Holdings Public Company Ltd (MEHL), which is one of the conglomerates controlled by the Burmese military.