Saudi Arabia’s Red Sea Gateway Terminal (RSGT), the largest container terminal in the Kingdom, announced on Sunday that its founders have sold 40 per cent of their combined equity stakes in the terminal to Saudi sovereign fund Public Investment Fund (PIF) and China’s COSCO SHIPPING Ports Limited (CSPL).

The transaction gives PIF and CSPL [direct] stakes of 20 percent each in RSGT, it said in a press statement.

The privately managed container terminal is also Saudi Arabia’s first Build-Operate-Transfer project.

The transactions imply an enterprise value for RSGT of $880 million and a total gross inflow of equity value for the founding shareholders $280 million, the press statement said.

RSGT’s founding shareholders - Saudi Industrial Services Company (SISCO), Xenel Industries, City Island Holding, a wholly-owned subsidiary of Malaysia’s MMC Corporation Berhad, and LogiPoint - had signed separate Share Purchase Agreements with PIF and CSPL in January. RSGT was then owned approximately 60 percent by Red Sea Ports Development Company (RSPD); 21.20 percent by SISCO; 8 percent by City Island; 6.80 percent by Xenel and 4 percent by LogiPoint.

The stake sale reduces the combined shareholding of the founders, under RSPD, to 60 percent, the statement said, adding that both new shareholders will help drive future growth on seaside and landside logistics.

Jens O Floe, CEO of RSGT, said the terminal will continue to focus on developing as a “niche emerging market operator with a keen focus on ports in the Red Sea and East Africa.”

“Moving forward, a key element of RSGT’s ongoing development plan, beyond domestic and targeted international expansion, is to further develop our modern port and supply chain facilities enabling us to better meet the needs of our global and local customers,” he added.

Under a new 30-year build, operate and transfer (BOT) agreement with Saudi Arabian Ports Authority ‘Mawani’ signed in December 2019, RSGT had taken over the operations of the northern section of Jeddah Islamic Port (previously known as the North Container Terminal or NCT) in April 2020, raising its annual throughput capacity from 2.5 million TEU to 5.2 million TEU to become the largest container terminal in Saudi Arabia.

RSGT’s annual throughput capacity is envisaged to grow to about 9 million TEU following an investment plan of $1.7 billion in infrastructure, equipment, and technology, the statement said.

J P Morgan acted as the sole financial advisor and Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie acted as the legal advisor to the Founding Shareholders on the transactions.

HSBC acted as the sole financial advisor to PIF and Freshfields Bruckhaus Deringer in association with the Law Firm of Salah Al-Hejailan acted as the sole legal advisor to PIF on the transaction.

(Writing by SA Kader; editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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© ZAWYA 2021