Thursday, March 13, 2014

Container Port Operator Sells Majority Share in Freight Handling Terminal Facilities

Disposal Comes Just One Year After Acquisition
Shipping News Feature

CHINA – HONG KONG – Just a year after investing HK$3.2 billion to purchase Asia Container Terminals Holdings Ltd (ACT), Singapore based Hutchison Port Holdings Trust (HPHT) has sold off 60% of the Hong Kong container shipping facility, 40% to Cosco Pacific and 20% to the China Shipping Terminal Development (Hong Kong) Company Limited. The move comes following a fall in HPHT's share price after a profits drop, principally as a result of losses due to the ACT acquisition and the resultant higher depreciation costs, and the damage inflicted by last year's forty day strike at another of the groups Hong Kong terminals.

In February Barclays Research gave HPHT a neutral rating due to ‘weak container volumes in Southern China and limited expansion inherent in the trust structure’. Ironically Barclays then went on to give better prospects to Cosco Pacific. The latest share sale of ACT and its group companies brings in an aggregate consideration of HK$2.472 billion for HPHT. ACT Holdings is the holding company of Asia Container Terminals Limited, the company that owns and operates Container Terminal 8 West, located at Kwai Chung, Hong Kong, adjacent to HPH Trust’s existing container facility, Hongkong International Terminals Limited and Cosco-HIT Terminals (HK) Limited.

All three parties to the new deal expressed their satisfaction with HPH Trust Chief Executive Officer Mr. Gerry Yim referring to it as a win-win situation, and continuing:

“This collaboration with Cosco Pacific and CSTD is a significant milestone achievement for HPH Trust that bodes well for the future of ACT, which handled over one million TEU in 2013. This will enhance the city’s competitiveness and bolster all aspects of port operations including flexibility, efficiencies, synergies, and profitability.”

Mr Wang Xingru, Vice Chairman and Managing Director of Cosco Pacific, expressed his delight at ‘joining hands together’ with HPH Trust and CSTD to develop ACT’s Terminal 8 West in Hong Kong, saying:

“Further to our existing successful joint venture with HPH Trust at Cosco-HIT’s Terminal 8 East in Hong Kong, I believe that Terminal 8 East and West will form a competitive platform to provide comprehensive and efficient terminal services to our customers. Our investment in ACT will enhance our terminal profitability and further strengthen our presence in Hong Kong which is one of the major gateways to South China.”

Mr Fang Meng, Managing Director of CSTD, was equally effusive, saying:

“We are pleased to team up with HPH Trust and Cosco Pacific in the ACT investment. This is CSTD’s first container terminal investment in Hong Kong and it extends our geographic presence along China’s coastal ports. The single contiguous 1,380-metre berth at Container Terminal 8 will enable us to establish Hong Kong port as a key container shipping hub for the deployment of ultra large containerships, including the 19,000-TEU vessels which are scheduled for delivery in November.”