A subsidiary of global port operator International Container Terminal Services, Inc.’s (ICTSI) is buying a 51% equity stake in a Sino-foreign joint-venture port operation in China’s Shandong Province while selling off its 60% shareholding in another port asset in the same area.
Manila-based ICTSI said these transactions are intended to consolidate and optimize the overall port operations within the Zhifu Bay Port area in Yantai, a prefecture-level city in the northeast of Shandong.
In a disclosure to the Philippine Stock Exchange, ICTSI said the Ministry of Commerce in Shandong had approved the acquisition by its indirect wholly-owned subsidiary, ICTSI (Hong Kong) Ltd., of the majority stake in DP World Yantai Co. Ltd.
The acquired firm will then be renamed Yantai International Container Terminals Ltd. (YICT), said ICTSI.
In the first transaction, ICTSI will acquire 51% of the total equity interest of YICT. DP World China (Yantai) Ltd. (DP World) will retain a 12.5% equity interest in YICT and the remaining 36.5% will be owned by Yantai Port Holdings Co. Ltd. (YPH).
YICT will become the only foreign container terminal within the Zhifu Bay Port area, with ICTSI as the majority shareholder.
ICTSI will then sell its entire 60% equity interest in Yantai Rising Dragon International Container Terminals Ltd. (YRDICTL) to Yantai Port Holdings. The transaction will make YPH the 100% owner of YRDICTL, which will be dedicated to handling local container cargo.
The price for the acquisition of 51% of YICT will be paid by ICTSI in four installments and partially funded from the Filipino port operator’s sale of its 60% stake in YRDICTL to YPH.
The major container operators within Yantai Port agreed to consolidate container operations to achieve synergy in allocating resources, improve economies of scale by separating the local and foreign container handling operations, and upgrade the professional level of the container operations of Yantai Port as a whole.
The consolidation move arose out of the basic requirements for “bonded operations” within the Yantai bonded port zone (Yantai Port) in Shandong,
DP World Yantai is a Sino-foreign equity joint venture between Yantai Port Group Co. Ltd., Yantai Port Holdings Co. Ltd. and DP World China (Yantai) Ltd. to operate a container, bulk, and roll-on/roll-off cargo terminal, and manage bonded warehousing and short-distance transport within the area of the Yantai Port.
It operates Berths no. 51, 52, 61 & 62 within Yantai Port with a total land area of 76.7 hectares, a combined length of 1,300 meters, and a controlling depth of up to 16 meters.
YRDICTL is a Sino-foreign equity joint venture between ICTSI and YPH to operate at Yantai Port. YRDICTL’s terminal covers a total land area of 28.2 hectares. It operates Berths 38 and 39 of the port, with a combined length of 730 meters and controlling depth of 14 meters. –– Roumina M. Pablo