Mercantile Ports & Logistics Ltd Customs Clearance and Lease Extension at Karanja (6374R)

TIDMMPL

RNS Number : 6374R

Mercantile Ports & Logistics Ltd

18 June 2018

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSI DERED TO BE IN THE PUBLIC DOMAIN

18 June 2018

Mercantile Ports & Logistics Limited

("MPL", or the "Company")

Customs Clearance Update and Extension to the Lease at Karanja

Mercantile Ports and Logistics (AIM:MPL), is delighted to announce that the it has received notification under section 7 of the Customs Act 1962 of the appointment of Karanja Port and Logistics Limited's ("KPL") Karanja Terminal as a customs port. The Board considers this to be the major development in the customs clearance process and consistent with Board's view that receipt of final customs' clearance is a formality. This notification is publicly available and is, therefore, expected to be helpful in the discussions with future customers. Final customs' approval is expected to be received within a few weeks.

A number of customers have already committed their business to KPL and the commercial pipeline is looking healthy as more businesses operating in the supply chain in the area become aware of the significant logistical advantages shipping via KPL offers. With this milestone secured, management believe that the first full month of revenue generation from cargo operations will commence from the 1(st) of August 2018.

The board is speaking with the Chief Minster's office with regards to the inauguration of the facility and will update the market in due course.

The Company is also pleased to announce that its wholly owned subsidiary, KPL has received confirmation from the Maharashtra Maritime Board (MMB) that KPL's lease over the land has been increased from 30 to 50 years, at nil cost. In addition, the MMB has also granted the Company the approval to develop an additional 200 acres of land on the site and build a further 1 kilometre of berthing capacity.

The Company considers the lease extension to beyond 2060 to be a significant endorsement from the key government organisation responsible for the maritime economy and illustrates the confidence that the MMB has in MPL. In addition, the Board is excited by the value creation opportunities that should be possible from the certainty of an additional 20 years of cash flows. The decision of the MMB comes on the back of significant interest in the new facility from a wide range of shipping and cargo businesses. Prime Minster Modi's government Sagarmala initiative supports port led development as a key driver for the Indian economy and MPL is proud to be an important contributor to the delivery of the Prime Minister's flagship policy.

The Sagarmala program for port led development aims to leverage India's vast coastlines and waterways to drive industrial development. Modernisation of India's port sector is targeting reduced cost and time for transporting goods, benefiting industries and export/import trade and contributing to Indian growth and prosperity. Karanja offers new port facilities on India's busy west coast, creating new jobs and using logistics expertise to deliver modern supply chain solutions.

In addition to the lease extension, the Directors were delighted to receive approval to extend the size of the port facility in due course. The Company's focus remains on completing the existing plan but, once the facility is fully operational and in response to customer demand, the Directors will explore the extension of the facility.

Executive Chairman Nikhil Gandhi welcomed the announcement: "Today's announcement is tremendous news. The wide-ranging interest in our new port from trading and logistics businesses will be given a further boost by the MMB's decision to support our long-term growth plans. Karanja lies at the heart of India's Mumbai trading gateway. Everyone involved in this project applauds the strategic ambition of both our government and our customers. We're proud to be working with all our stakeholders to deliver on this vision."

 
 Enquiries: 
 MPL                      C/O Redleaf Communications 
                          [phone] 
 Cenkos Securities plc    Stephen Keys/Camilla Hume 
                          [phone] 
 Redleaf PR               Charlie Geller/Fiona Norman 
 (Financial PR)           [phone] 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

MSCEANKXFDLPEFF

(END) Dow Jones Newswires

June 18, 2018 02:00 ET (06:00 GMT)