HONGKONG, May 28 (Xinhua) -- China Merchants Port Holdings Company Limited (CMPort; 00144.HK) announced it completed initial closing of a proposed acquisition on acquiring equities of eight terminals held by French container shipping giant CMA CGM SA (CMA CGM).
Previously in late 2019, CMPort entered into a master agreement with CMA CGM and their joint venture Terminal Link SAS (Terminal Link) to set out the framework in relation to the proposed acquisition of equities in 10 terminals held by CMA CGM.
Equities of the eight target terminals include 50 percent of Odessa Terminal Holdco Ltd. (Ukraine), 49 percent of CMA CGM-PSA Lion Terminal Pte. Ltd. (Singapore), 100 percent of Kingston Freeport Terminal Limited (Jamaica), 30 percent of Rotterdam World Gateway (the Netherlands), 24 percent of Qingdao Qianwan United Advance Container Terminal Co., Ltd. (China), 47.25 percent of First Logistics Development Company (Vietnam), 14.5 percent of Laem Chabang International Terminal Co., Ltd. (Thailand) and 100 percent of CMA CGM Terminals Iraq S.A.S, which holds the lease and all assets and liabilities of Umm Qasr terminal (Iraq).
Table 1: The Terminals Portfolio of the Proposed Acquisition
Pursuant to the master agreement, CMPort would subscribe the mandatory convertible bonds to be issued by Terminal Link and provide the loan to Terminal Link for the purpose of financing the proposed acquisition.
According to CMPort, the aggregate amount paid for the subscription of the mandatory convertible bonds and the principal amount of the loan advanced at the initial closing was approximately 814.78 million U.S. dollars, taking place on the same date when the initial closing was completed.
As their master agreement showed, Terminal Link would acquire a portfolio of participations in 10 terminals located in Asia, Europe, the Middle East and the Caribbean, for a total consideration of up to 955 million U.S. dollars. CMPort would subscribe for the mandatory convertible bonds in an amount equal to 49 percent of CMPort's equity interest in Terminal Link with the overall subscription price up to 468 million U.S. dollars. Separately, CMPort entered into the loan facility agreement to grant Terminal Link a secured term loan facility of a principal amount up to 500 million U.S. dollars with a maturity of 8 years.
Meanwhile, CMPort will, in accordance with their master agreement, be entitled to the guaranteed return provided by CMA CGM.
Currently, the three parties continue working towards the transfer of equity interests in the two remaining target terminals and a further announcement will be made when the second closing takes place.
For CMPort, the initial closing is another cornerstone of a mutually beneficial strategic partnership between CMPort and CMA CGM in operating and developing container terminals on a global basis and further extending their business partnership.
With the vision of "to be a World’s Leading Comprehensive Port Service Provider", CMPort has been actively exploring and acting on acquisition opportunities overseas as a pertinent mean to effectively add new growth drivers to its existing and sustainably growing ports business.
Upon completion of this initial closing, Terminal Link SAS will own various levels of equity interests in a portfolio of 21 terminals serving various regions such as Asia, Europe, Middle-East and the Caribbean. Simultaneously, CMPort's global network also expanded from 18 countries and regions to 25 countries and regions.
CMPort believes that Terminal Link's exposure to terminals in emerging and developed markets and its potential pipeline of new projects present another driver for its volume growth and financial returns in the future. Its partner CMA CGM, with its affiliates, agrees to make its best endeavors to cooperate and support the other terminals of CMPort, with a target of an additional 300,000 TEUs per annum to CMPort’s West Shenzhen ports. (Contributed by Li Binbin and edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
