ICTSI says Hutchison deal worth $400M

Port operator International Container Terminal Services Inc. (ICTSI) has completed the sale of its shareholdings in its international holding company and its Mexican passenger cruise terminal for approximately $400 million, the company told the Philippine Stock Exchange.

The sale of ICTSI's founder shares in ICTSI International Holdings Corp. and its interest in Ensenada Cruiseport Village S.A. de C.V. to the Hong Kong-based Hutchison International Port Holdings Ltd. was completed last Friday, June 15, after the ICTSI board approved the agreement last May 28.

ICTSI chairman and president Enrique Razon Jr. said the sale of IIHC "will strengthen the balance sheet of ICTSI and enable it to become substantially debt free with the flexibility to pursue new port projects here and abroad."

Specifically, the proceeds of the sale will be used to retire ICTSI's $130-million worth of dollar convertible notes, which have caused a dent in ICTSI's bottom line due to the amortization of foreign exchange losses and the accreditation of the put premium.

ICTSI has sold its 30,050,000 founder shares in IIHC which constitute 25 percent of the outstanding shares. The founder shares have 10 votes per share and therefore have controlling rights in IIHC. A wholly-owned subsidiary, International Container Terminal Holdings Inc. (ICTHI) holds another 43,272,000 preferences B shares which consists 36 percent of IIHC's outstanding shares.

The sale transaction also involved Hutchison's buyout of the minority shareholders in IIHC, namely: J.P. Morgan Capital L.P.; Sixty Wall Street Fund L.P.; Kane & Co., Capital International Global Emerging Markets Private Equity Fund L.P. and the Employees Stock Option Plan.

IIHC operates eight container terminals in the six countries of Argentina, Mexico, Saudi Arabia, Pakistan, Tanzania and Thailand.

Razon said ICTSI will retain its international senior management structure and use the Manila International Container Terminal as its flagship terminal to pursue new port projects other than in the abovementioned areas, where ICTSI cannot engage in port projects in the next four years.

Among the company's newest thrust is the 30-year concession for the Port of Suape in northeastern Brazil, where it beat out two other consortia with a $124-million bid last May. – Conrado Diaz Jr.