Bruce Barnard, Special Correspondent | Sep 10, 2012 9:17AM EDT
APM Terminals has acquired a 37.5 percent stake in Russia’s Global Ports worth $860 million, making the port-operating arm of Denmark’s A.P. Moller-Maersk the biggest direct foreign investor in Russia’s transport infrastructure.
Under the terms of the deal announced today in London, APM is buying 50 percent of Russian private transport group N-Trans’ 75 percent stake in Global Ports.
This will leave both companies with a 37.5 percent stake, with the remaining 25 percent publicly traded as global depository receipts in London, where Global Ports listed in 2011.
Netherlands-based APM, which is paying $840 million in cash and assuming $20 million of debt, will run Global Ports, Russia’s biggest container stevedore, on an equal basis with N-Trans.
The deal, which comes five weeks after Russia’s accession to the World Trade Organization, values Global Ports’ share capital at approximately $2.3 billion.
During the first two years of the partnership, neither party can increase or reduce its stake. In the following three years they can increase or decrease their holdings, and after five years they are free to dispose of their stakes.
The two companies also agreed to reduce their voting rights in Global Ports by converting them into non-voting stock, giving the 25 percent free floated shares in London about 40 percent of the total voting rights.
“Global Ports will continue to be focused on the high growth markets of Russia, CIS [Commonwealth of Independent States] and the Baltic states and will become the growth platform for APM Terminals and N-Trans in the region,” the companies said.
The companies said they expect to close on the deal, which requires regulatory approvals, by the end of the year.
“The Russian market showed impressive growth rates in the past with an average growth over 15 percent a year in the past five years,” said APM Terminals CEO Kim Fejfer.
“The rapidly expanding middle class, Russia’s integration with the global economy as evidenced by the recent WTO membership and the country’s wealth of natural resources will continue to fuel the growth in exports and imports in the long run.”
“The partnership with APM terminals will give us global expertise in port development and combined with our understanding of regional markets, gives us a great opportunity to expand our development in the region,” said Global Ports chairman Nikita Mishin.
Global Ports has two container terminals in St Petersburg; one in the Far Eastern port of Vostochny, in which Dubai’s DP World has a 25 percent stake; and an inland container depot near St. Petersburg. It also has box terminals in the Finnish ports of Helsinki and Kotka and an oil export terminal in Estonia. Global Ports handled 1.35 million 20-foot equivalent units, 30 percent of Russia’s total ocean box traffic, in 2011 and shipped out 23 percent of the total fuel exports from the former Soviet republics.
Global Ports booked revenues of $501 million and adjusted earnings before interest, tax, depreciation and amortization of $282 million in 2011.
APM Terminals reported a second quarter profit of $160 million, down from $162 million a year ago, on revenues of $1.19 billion against $1.15 billion. Traffic grew 7 percent to 9.1 million TEUs in the three months to June 30.
Contact Bruce Barnard at brucebarnard47@hotmail.com.