ICTSI to raise $750M via notes issue

MANILA, Philippines - Global port operator International Container Terminal Services Inc. (ICTSI) will raise as much as $750 million through the issuance of corporate notes.

The fresh capital will be used to bankroll acquisitions and general corporate expenses, a top company executive said.

In a disclosure to the Philippine Stock Exchange, ICTSI finance manager Arthur Tabuena said the board of directors “approved the establishment of a medium term note programme by its subsidiary, ICTSI Treasury B.V.”

“The aggregate nominal amount of notes outstanding that may be issued from the programme will not at any time exceed $750 million or its equivalent in other currencies,” he added.

Under the fundraising plan, ICTSI Treasury can issue corporate notes in one of more series from time to time. The notes will be guaranteed by parent firm ICTSI.

“Proceeds from future programme takedowns can be used to finance the group’s capital expenditures and acquisitions,” Rafael J. Consing Jr., ICTSI vice president and treasurer, said in a mobile phone message.

The port operator, controlled by businessman Enrique K. Razon Jr., is expanding its portfolio particularly in emerging markets like Africa to diversify its revenue streams amid the prolonged economic slump in Europe.

Last week, ICTSI announced it is planning to acquire 10 port new contracts over the next 10 years to capture emerging market opportunities. In Africa, it is looking at ports in Congo, the Ivory Coast, Cameroon and Kenya.

Its core business strategy is to continue developing its existing portfolio and pursue an active program to acquire new terminal concessions in Asia, Australia, the Indian subcontinent, the Middle East, Africa, Europe and the US.

The ICTSI board also approved the issuance of the first tranche of notes based on terms and conditions that will be determined in the next few days.

In line with the planned notes sale, ICTSI and ICTSI Treasury signed the relevant fundraising documents like the program agreement, trust deed, agency agreement, and operating and administrative procedures.

The port management company is into the operations of 25 maritime terminals and port projects in 17 countries in four continents, with a combined equitized capacity of 7.89 million twenty-foot equivalent units. It has six ports in the Philippines.

Last month, ICTSI increased its stake in Karachi port owner Pakistan International Container Terminal Ltd. to 63.59 percent from 47.88 percent as it pulled out of Syria due to escalating violence in the civil war-struck Middle Eastern country.