China Merchants Port Holdings (CMPort) and French Container Shipping Company, CMA CGM, entered into the Master Agreement which will see their jointly-owned business, Terminal Link, acquire an interest in 10 terminals owned by CMA CGM for $955 million.
The terminals are Odessa Terminal (Ukraine), CMA CGM PSA Lion Terminal (CPLT) (Singapore), Mundra Terminal (India), Kingston Freeport Terminal (Jamaica), Rotterdam World Gateway (Netherlands), Gemalink (CaiMep, Vietnam), Qingdao Qianwan United Advance Container Terminal (China), Vietnam International Container Terminal (Ho Chi Minh City, Vietnam), LaemChabang International Terminal (Thailand) and Umm Qasr Terminal (Iraq).
With the Proposed Acquisition, CMPort will be able to enter a mix of regions covering Asia, Europe, Middle-East and the Caribbean, each of which would be enhanced with their respective strengths and growth potential. CMPort has been actively exploring and acting on acquisition opportunities overseas as a pertinent means to effectively add new growth drivers to its existing and sustainably growing ports business.
CMPort will also subscribe for the Mandatory Convertible Bonds in an amount equal to 49% of CMPort’s equity interest in Terminal Link with the overall subscription price up to US$468 million. Separately, CMPort entered into the Loan Facility Agreement to grant Terminal Link a secured term loan facility of a principal amount up to US$500 million with a maturity of 8 years.
The successful partnership initiated in 2013, between CMA CGM, the world’s fourth largest container shipping group, and CMPort resulted in CMPort acquiring 49% equity interest in Terminal Link, the Joint Venture formed out of the partnership. Terminal Link’s principal business activity is the provision of marine terminal services.
CMPort was listed on the Hong Kong Stock Exchange in 1992 as the first mainland red chip enterprise to be listed in Hong Kong. CMPort is the World’s leading port developer, investor and operator, with a comprehensive ports network portfolio spanning six continents and 18 countries and regions.
Previously Terminal Link owned various levels of equity interests in 13 Terminals located in eight countries across four major continents: France, Morocco, Malta, the United States, the Republic of Cote d’Ivoire, Belgium, Greece and South Korea. Terminal Link handled a volume of over 2.8 million TEU in 2018.
Upon completion of the Proposed Acquisition, Terminal Link will own various levels of equity interests in a portfolio of 23 terminals serving various regions such as Asia, Europe, Middle-East and the Caribbean. And hence，CMPort’s global presence will expand from 18 to 26 countries and regions.
The proposed acquisition constitutes a unique opportunity to expand Terminal Link’s network and gain exposure to a sizeable portfolio of terminals located in regions with strong growth prospects.
The Proposed Acquisition is another cornerstone of a mutually beneficial strategic partnership between CMPort and CMA CGM in operating and developing container terminals on a global basis and extending their relationships as business partners. CMPort believes that Terminal Link’s exposure to terminals in emerging and developed markets and its potential pipeline of new projects present another driver for its volume growth and financial returns in the future. CMA CGM, with its affiliates, agrees to make its best endeavors to cooperate and support the other terminals of CMPort.