Hutchison Port buys terminal to benefit from rising traffic
Source: Bloomberg News |
March 8, 2013, Friday
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Print Edition
Print Edition
HUTCHISON Port Holdings Trust, partly owned by the world's second-biggest container port operator, acquired a Hong Kong box terminal from DP World Ltd and a partner as it seeks to benefit from rising trade in the South China region.
Hutchison Port will pay HK$3.2 billion (US$413 million) in cash to buy the entire stake in Asia Container Terminal Ltd from DP World and a unit of PSA International Pte, it said in a statement yesterday. DP World also sold some other assets in Hong Kong to raise US$742 million, the Dubai-based company said in a separate statement.
The purchase will help Hutchison Port boost capacity at Hong Kong after container volumes gained in the past two years, according to Karen Li, an analyst at JPMorgan Chase & Co. DP World is selling its assets in the city as it seeks funds needed for expansion in other markets and shore up its capital.
"Our first take of the deal is that it is positive for Hutchison as this can help resolve its capacity constraints in Hong Kong," Li said. "Following the stronger-than-expected volume growth over past two years, Hutchison is hitting the capacity bottleneck earliest this year, if current growth pace continues."
Billionaire Li Ka-Shing's Hutchison Whampoa Ltd, the world's second-biggest container port operator, owns 28 percent of Hutchison Port Holdings, according to data compiled by Bloomberg News. Hutchison Port handled 22.9 million 20-foot boxes last year at its facilities in Hong Kong and Shenzhen, 5 percent more than a year earlier. The company is also developing additional berths in the South China port.
DP World, the world's third-largest container port operator, sold a 55.2 percent stake in Asia Container Terminals to Hutchison Port for US$279 million. It also offloaded 75 percent of its stake in CSX World Terminals Hong Kong Ltd and ATL Logistics Centre Hong Kong Ltd to Goodman Hong Kong Logistics Fund for US$463 million.
"The company is trying to focus its investments where it has great market share and control," Redwan Ahmed, a Dubai-based analyst at investment bank EFG-Hermes Holding SAE said by telephone. "The company may reinvest this money in markets like India and Africa where there is a lot more growth potential."
DP World said it will form a strategic partnership with Goodman Hong Kong to manage Kwai Chung Container Terminal and the ATL Logistics Centre, and will continue to manage port operations with completion of the transaction expected at the end of the first half. The deal with Hutchison Port closed yesterday, it said.
DP World, majority owned by state-owned holding company Dubai World, said it expects to make a net capital gain of US$151 million from the transactions, which will help maintain the company's capital position.
Hutchison Port will pay HK$3.2 billion (US$413 million) in cash to buy the entire stake in Asia Container Terminal Ltd from DP World and a unit of PSA International Pte, it said in a statement yesterday. DP World also sold some other assets in Hong Kong to raise US$742 million, the Dubai-based company said in a separate statement.
The purchase will help Hutchison Port boost capacity at Hong Kong after container volumes gained in the past two years, according to Karen Li, an analyst at JPMorgan Chase & Co. DP World is selling its assets in the city as it seeks funds needed for expansion in other markets and shore up its capital.
"Our first take of the deal is that it is positive for Hutchison as this can help resolve its capacity constraints in Hong Kong," Li said. "Following the stronger-than-expected volume growth over past two years, Hutchison is hitting the capacity bottleneck earliest this year, if current growth pace continues."
Billionaire Li Ka-Shing's Hutchison Whampoa Ltd, the world's second-biggest container port operator, owns 28 percent of Hutchison Port Holdings, according to data compiled by Bloomberg News. Hutchison Port handled 22.9 million 20-foot boxes last year at its facilities in Hong Kong and Shenzhen, 5 percent more than a year earlier. The company is also developing additional berths in the South China port.
DP World, the world's third-largest container port operator, sold a 55.2 percent stake in Asia Container Terminals to Hutchison Port for US$279 million. It also offloaded 75 percent of its stake in CSX World Terminals Hong Kong Ltd and ATL Logistics Centre Hong Kong Ltd to Goodman Hong Kong Logistics Fund for US$463 million.
"The company is trying to focus its investments where it has great market share and control," Redwan Ahmed, a Dubai-based analyst at investment bank EFG-Hermes Holding SAE said by telephone. "The company may reinvest this money in markets like India and Africa where there is a lot more growth potential."
DP World said it will form a strategic partnership with Goodman Hong Kong to manage Kwai Chung Container Terminal and the ATL Logistics Centre, and will continue to manage port operations with completion of the transaction expected at the end of the first half. The deal with Hutchison Port closed yesterday, it said.
DP World, majority owned by state-owned holding company Dubai World, said it expects to make a net capital gain of US$151 million from the transactions, which will help maintain the company's capital position.
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