Zim sells stake in Lagos terminal
Liner carrier Zim said over the weekend it has sold a 47.5 percent stake in a container terminal in Lagos to a group headed by the terminal operator China Merchants.
The sale of its stake in the Tin Can Island Container Terminal (TICT) terminal will net Israel-based Zim $154 million, the company said. China Merchants is partnering with the China-Africa Development Fund in its ownership stake. The remainder of the terminal is owned by the Bollore Group, a French company with significant assets in Africa.
“Zim operates on a wide scale in the trade between Asia, Europe and the United States, to Nigeria,' said Rafi Danieli, Zim president and chief executive officer. 'In recent years Zim made significant investments to develop the terminal, bringing it to commercial success. The structure of the current deal ensures the continued partnership between Zim and TICT for many years to come, and Zim's customers will continue to enjoy the highest levels of service in Nigeria. The purchaser is an experienced group in operating and developing container terminals, and I am convinced that it will continue to make a valuable contribution to the Nigerian economy and port development. At the same time, the improved liquidity will allow Zim to develop and expand its shipping transportation activities in the international lines in Asia, North America and Europe.”
As part of the deal, Zim has signed a 10-year agreement with the terminal for vessel calls in Lagos.
The three-berth terminal has capacity for about 360,000 TEUs per year. A fourth berth is being added to expand capacity to 400,000 TEUs per year.
“The deal will generate immediate additional liquidity of $154 million for Zim, in addition to the company’s accumulated cash reserves, which at the end of the second quarter amounted to $228 million,' said Zim Chief Financial Officer Allon Raveh. 'Upon completion of this deal, we will also successfully complete another stage in the implementation of our long-term business plan. This will contribute to a significant improvement in Zim’s financial profile, which also gives us additional management flexibility and stability.'