China Merchants Holdings International (CMHI) has announced it will be entering into a sale and purchase agreement with Fina Holding A.S. and its individual shareholders, as well as a Luxembourg-registered joint venture, formed between COSCO Pacific and CIC Capital Corporation.
As part of the joint venture with COSCO Pacific and CIC, the trio are to take ownership of Kumport Terminal in Turkey.
A productive terminal in Turkey is seen as another key node in the Maritime Silk Road by the Chinese state.
This news follows China Merchants’ recent decision to merge with logistics enterprise Sinotrans & CSC Holdings, where both companies, in an almost certain deal, will restructure and integrate their companies.
The tripartite consortium will have an equity interest of 65% in Kumport upon the completion of the acquisition, at an estimated cost of US$940 million, with the remaining 35% equity interests held by the State General Reserve Fund in Oman.
CMHI, COSCO Pacific and CIC Capital will have equity stakes of 40%, 40% and 20% in the consortium, respectively.
Mr Li Jianhong, Chairman of the Board of Directors with CMHI, said: “With the promising economic prospects of Turkey, the hinterland of Kumport, its position as an important node situated along both the ‘Silk Road Economic Belt’ and the twenty-first century Maritime Silk Road, and with the Chinese government’s pursuance of the ‘One Belt, One Road’ initiative, strong growth potential for demand of container ports and logistics services is expected in the future.
“In addition, the acquisition will further enhance the company’s global port network layout and create synergies with other terminals within the company’s port portfolio, which is in line with the company’s overall development strategy.”
China Merchants has had a strong first half to 2015. Li Jianhong cited the reason for the good performance as indicative of contributions from overseas ports and the Sri Lanka project.
Container throughput from the group’s mainland ports in China reached 30.36 million TEU, which was an increase of 5% year-on-year.
In H2, 2015, Mr Li Jianhong aims to increase synergies among port projects in China and overseas, as well as balance short-term gain with long-term growth.
Fact File: Kumport is the third largest container terminal in Turkey and is located within the Ambarli Port Zone on the northwest Marmara Sea, which is on the European side of Istanbul, the capital of Turkey, and an important strategic location at the junction in the Eurasian region. The six-berth terminal currently has a shoreline of 2,180 metres and maximum water depth of 16.5 metres, which is capable of accommodating the world’s largest container vessels currently. The container handling capacity of the terminal is currently 1.84 million TEU, which can potentially be expanded to 3.5 million.
(Source: China Merchants)