ICTSI sees P5-B equity from foreign unit

Port operator International Container Terminal Services Inc. (ICTSI) will receive P5 billion in equity investment from its foreign subsidiary as part of the proceeds from last year’s sale deal with Hutchison International Port Holdings Ltd. (HPH), the company told the Philippine Stock Exchange.

ICTSI executive vice president Edgardo Abesamis said the Cayman Island-based subsidiary-International Container Terminal Holdings Inc. (ICTHI) – will reinvest to its parent company the amount through the issuance of new preferred non-voting shares.

The ICTSI board has authorized the issuance of five billion preferred non-voting shares at a premium to accommodate ICTHI’s infusion. The shares, aside from non-voting, are unlisted and are designed not to dilute the shareholdings of the existing ICTSI stockholders, Abesamis said.

ICTSI shares closed yesterday at P2.7 each, up five centavos from Tuesday’s close.

Abesamis said the share issuance "will allow ICTSI to use the proceeds received by ICTHI from the transaction with HPH in June last year to buy back or redeem its $130 million 1.75- percent convertible notes due 2004."

The P5-billion proceeds will be put in by ICTHI in several tranches, the last of which will be in June this year.

In June 2001, ICTHI sold to HPH its 900,000 shares in Langer Holdings Ltd. which owns the Ensenada Cruiseport Village, a Mexican cruise terminal, for $30 million.

In addition, ICTSI took in $60 million as gain from the put and call option granted by ICTHI to HPH over ICTSI’s 43.2 million preference B shares in another foreign subsidiary, ICTSI International Holdings Corp. (IIHC).

Simultaneously, ICTSI sold its 30 million founder shares in IIHC, which operates eight container terminals in the six countries of Argentina, Mexico, Saudi Arabia, Pakistan, Tanzania and Thailand, also to HPH for another $70.3 million.

With the sale, ICTSI will concentrate on the operations of its flagship port, the Manila International Container Terminal, along with the newly-acquired 30-year concession in the Port of Suape in northern Brazil.

With the one-time gain from the sale of its foreign terminals, ICTSI’s net profit soared to P3.28 billion in the first nine months of 2001 from only P59.44 million in the previous year.

In 2000, ICTSI earned only P31.3 million but this was already a huge improvement from a P1.3-billion loss in 1999, when the company struggled with higher amortization of foreign exchange losses and the accretion of the put premium on its $130-million convertible bond issue.