MANILA, Philippines - Listed port giant International Container Terminal Services Inc. (ICTSI) has taken in the world’s third largest container shipping lines as partner to improve the viability of its operations in Nigeria.
ICTSI treasury director Arthur Tabuena informed the Philippine Stock Exchange (PSE) that the company through subsidiary ICTSI Capital BV executed a share purchase agreement with CMA Terminals of France – a member of Marseille-based CMA-CGM Group.
Under the agreement, Tabuena said ICBV would divest its 25-percent interest composed of 25,000 shares in its Nigerian subsidiary Lekki International Container Terminal Services LFTZ Enterprise worth $25,000 in favor of CMAT.
He pointed out that the new partnership would positively contribute to the financial performance of the project in the Lagos Free Trade Zone at Ibeju Lekki, Lagos, Nigeria in the future.
“Having the third-largest container shipping company in the world as a partner in the project is expected to help accelerate the volume ramp-up of the company’s green field project in the early years of its operation and establish a more stable core throughput for LICTSLE in the long run,†Tabuena said.
On top of the cash payment, CMAT would also pay 25 percent of LICTSLE’s total debts and accrued expenses
“The said joint venture will also reduce the investment requirement of ICTSI in LICTSLE to its pro-rata shareholding,†he added.
In August of 2012, ICTSI announced it was investing in $225 million to provide cargo handling equipment and information technology infrastructure at Lekki container terminal in Tolaram Port in Lagos, Nigeria.
This after ICTSI signed with Lekki Port LFTZ Enterprises a 21-year sub-concession agreement for exclusive development and operation of the Lekki international container terminal where it intends to invest around $1.4 billion.
Slated for completion by 2016, the Lekki port will have a 1,200-meter quay and an annual capacity of 2.5 million twenty-foot equivalent units, making it the largest single terminal in sub-Saharan Africa.
Given its location within West Africa’s largest market, the Lekki port has strong potential to emerge as the region’s dominant transshipment hub.
Last week, the port giant announced that it was investing $100 million over the next five years to establish its first terminal in Congo. ICTSI through its subsidiary ICTSI Coöperatief U.A. controls ICTSI DR Congo with 60 percent while its partner La Societe De Gestion Immobiliere Lengo (SIMOBILE) owns 40 percent.
Earnings of ICTSI jumped 27 percent to $135.65 million in the first nine months of last year from $106.84 million in the same period in 2012 on the back of strong revenues arising from its continued expansion overseas.