Mercantile Ports & Logistics Ltd Progress Update and Memorandum of Understanding (2156Z)
13 March 2017 - 6:01PM
UK Regulatory
TIDMMPL
RNS Number : 2156Z
Mercantile Ports & Logistics Ltd
13 March 2017
13 March, 2017
Mercantile Ports & Logistics Limited (the "Company" or
"MPL")
MPL Update, Memorandum of Understanding to develop operations
hub at MPL's facility
in Mumbai
Mercantile Ports and Logistics (AIM:MPL), and its wholly owned
subsidiary M/s. Karanja Terminal and Logistics Pvt. Ltd, provide
the following update on progress developing its modern port and
logistics facility in Navi Mumbai, India, and announces the signing
of a Memorandum of Understanding ("MoU") with a publicly listed
international construction company (the "Customer").
Memorandum of Understanding
MPL is pleased to announce that it has, following the Customer
having conducted an extensive due diligence process, entered into a
MoU with the Customer. Under the terms of the MoU, the Customer is
expected to lease a significant proportion of the Company's
completed project in order to develop an operations hub for steel
superstructure fabrication. The infrastructure for this hub, which
will be constructed by the Customer, would include supply, storage,
fabrication, painting, assembly and waterway transport facilities
at MPL's port. The land on which this operations hub is to be built
is expected to be leased to the Customer for an initial period of
three years, with an option to renew annually for a further three
years.
The Company is pleased with the level of interest it has
received from other potential customers, who are attracted by the
ability to secure priority berthing at the Company's facility. The
Company expects to enter into further MoUs in the coming
months.
Progress Update
Over the last quarter, work has progressed well and the Board is
pleased with developments. The focus has continued to be on land
reclamation, and piling for the jetty. So far this year, the
Company estimates that approximately 10 acres worth of reclamation
material has arrived on site, some of which has been used for
surcharging. Surcharge material (being material that is temporarily
placed on top of reclaimed land in order to compact it) can itself
be used as reclamation material once it has served its purpose as
surcharge material. As at today's date, some 79 acres (or 40 per
cent) of the overall reclamation target has been achieved, although
the Company is pleased to report that an estimated 60 per cent of
the total reclamation material required to complete the facility is
now on site.
Piling for the construction of the berths capable of receiving
vessels is progressing, with work being carried out on a 24 hour
per day basis, as is the case with fabrication of precast concrete
panels (deck slabs). Engineers did encounter previously undetected
hard rock in the harbour basin during piling, and dredging this
rock from the berth reduced the pace of piling whilst this matter
was resolved. Notwithstanding this, as at today's date, piling for
approximately 40 per cent of the final quay length has now been
completed. In addition, the increased volume of traffic to the site
caused significant wear and tear to the site's access road and
meant that there was a reduction in the number of vehicles able to
access the site during January 2017 whilst this problem was
addressed. The Company can report that the issue has now been
resolved and traffic to the site has returned to scheduled
levels.
The Company's main contractor is operating at full capacity and
the Company's engineers remain engaged with the contractor to
ensure that the configuration of the final facility is optimised to
achieve maximum utilisation of the land mass created. The Company
is confident of completing its facility by the end of this year,
although the matters referred to above, taken together, have
contributed to adding approximately eight weeks to the previously
reported timetable.
It is not appropriate for construction projects such as this to
be commented upon on a daily basis but management will endeavour to
provide regular updates to investors both by way of announcements
and through drone footage on the Company's website. The Company
would also welcome any shareholders who plan to visit Mumbai and
wish to visit the site to see the progress that has been made.
Any shareholder interested in visiting the site should contact
the Company's Investor Relations adviser, Redleaf Communications,
by calling 0207 382 4769 or by emailing MPL@RedleafPR.com.
Enquiries:
MPL Pavan Bakhshi/Jay Mehta
C/O Redleaf Communications
+44 (0) 20 7382 4769
Cenkos Securities plc Stephen Keys/Camilla
(Nomad and Broker) Hume
+44 (0) 20 7397 8926
Redleaf Communications Charlie Geller/Sam Modlin
(Financial PR) +44 (0) 20 7382 4769
MPL@redleafpr.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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