Escalating violence forces ICTSI to pull out of Syria

MANILA, Philippines - International Container Terminal Services Inc. (ICTSI) is pulling out of its operations in Syria amid the escalating violence in the civil war-struck Middle Eastern country.

In a disclosure to the Philippine Stock Exchange, ICTSI said it sent, through its wholly-owned unit Tartous International Container Terminal (TICI), a notice of termination of its 10-year agreement with Syrian port agency Tartous Port General Co. (TPGC) to develop and operate the Tartous container port located on the Mediterranean coast of Syria.

“TICI was compelled to send the termination notice because of TPGC’s refusal to recognize the occurrence of unforeseen change of circumstances brought about by civil unrest and violence which has gravely affected businesses and trade in Syria,” ICTSI said.

ICTSI said the “full-fledged civil war has exposed everyone to increasing threat of death and destruction on a daily basis, which is considered as a force majeure under the agreement” signed in March 2007.

The Arab country, plagued by chaos and fighting, ICTSI said, presents a grave danger not only to Syrian people but to the neighboring countries and the world as well.

TICT registered $2 million in revenues, representing 0.4 percent of ICTSI’s consolidated volume and revenues. It handled 26,661 20-foot equivalent container units in the first nine months of the year.

The Syrian operation also accounted for 0.4 percent of ICTSI’s total assets as of September this year.  

ICTSI said it would write off the deal and assets in Syria at a cost of $1.2 million and save around $4 million annually in terms of port fees and cash operating expenses from the termination of the agreement and write-off.

Meanwhile, ICTI disclosed that it has increased its direct and indirect investment in Pakistan International Container Terminal Ltd. (PICT) to 63.59 percent.

This after its indirect wholly-owned subsidiary ICTSI Mauritius Ltd. entered into a deal to acquire Aeolina Investments Ltd., a British Virgin Islands-registered company.

Aeolina owns a 15.72-percent stake in PICT, which owns and operates a container cargo terminal located at the Karachi Port in Pakistan.  The port has a maximum handling capacity of 750,000 TEUs.

Moreover, ICTSI announced it has earmarked $83 million for additional working capital requirements of its domestic and foreign expansion projects in 2013.