COSCO Pacific to acquire Istanbul container terminal for $940m

The port terminal operator, in partnership with China Merchants Holdings International and CIC Capital, has agreed to purchase a majority stake in Kumport Terminal at the Ambarli Port Complex in Istanbul, Turkey.    COSCO Pacific Limited has established a joint venture China Merchants Holdings International (CMHI) and CIC Capital to acquire a majority share of Fina Liman and Kumport, owners of Kumport Terminal in Istanbul, Turkey, according to a statement from the terminal operator.
   Kumport Terminal, the sole asset of Fina Liman, is a container terminal at the Ambarli Port Complex situated on the northwest coast of the Marmara Sea on the European side of Istanbul.
   COSCO Pacific, CMHI and CIC Capital agreed to purchase approximately 64.522 percent of the issued share capital of Fina Liman, the remainder of which (35.478 percent) is held by Turkac, for an initial purchase price of $919,852,418.33. In addition, the companies will acquire shares in Kumport representing approximately 1.346 percent of its issued share capital, the remainder of which (98.654 percent) is owned by Fina Liman, for an initial purchase price of $20,275,501.76.
   The total initial purchase price for the majority shares in Fina Liman and Kumport comes to $940.13 million. COSCO said in a statement the final purchase price will be determined based on the net debt and working capital of Fina Liman and Kumport at closing.
   COSCO Pacific, CMHI and CIC Capital, through their respective wholly-owned subsidiaries will hold 40 percent, 40 percent and 20 percent of the purchased shares upon completion of the transaction.
   The deal is conditional upon various conditions, including approval from the Turkish Competition Board.
    COSCO noted the Consortium SPV, the joint venture formed in order to purchase Kumport, “is not a subsidiary of the company and will be accounted for as a joint venture of the company in its financial statements.”
   Kumport Terminal, the third largest container terminal in Turkey, “is located at a gateway to the Black Sea and a strategic interchange between Europe and Asia,” according to COSCO Pacific. It has six berths with a current capacity of 1.84 million TEUs and space for expansion to up to 3.5 million TEUs. The terminal is able to handle containerships with capacity for up to 18,000 TEUs and had a container throughput of 1.4 million TEUs in 2014.
   “The (COSCO) Board believes that Kumport Terminal has good development prospects given the potential business synergy between Kumport Terminal and the Company’s existing investment in Piraeus Container Terminal S.A. in Greece and the cooperation between the Company and CMHI in light of their respective experience in investing, managing and operating overseas port operations as well as port operations in the PRC and their respective relationships with liners,” the terminal operator said of the acquisition.
   “Furthermore, Kumport Terminal is situated in Turkey, which is a strategic location along the ‘Silk Road Economic Belt and the 21st Maritime Silk Road,’” it added. “Taking into account the above factors, the board believes that the transaction is a valuable investment opportunity for the company to enhance the company’s terminal profitability and create value for shareholders, and that the terms of the transaction are fair and reasonable and in the interests of the shareholders as a whole.”