ICTSI (Hong Kong), an indirect wholly-owned subsidiary of International Container Terminal Services Inc (ICTSI) of the Philippines will acquire 51 percent of a foreign container terminal in China's Shandong Province.
In a disclosure to the Philippine Stock Exchange, ICTSI said it would acquire a majority stake in DP World Yantai, which will be renamed Yantai International Container Terminals (YICT), reported Manila Bulletin.
As part of the deal, ICTSI will also sell its entire 60 percent equity interest in Yantai Rising Dragon International Container Terminals (YRDICTL).
The acquisition has been approved by the Ministry of Commerce-Shandong Province of China.
"The objective of these transactions is to consolidate and optimise the overall port operations within the Zhifu Bay Port area in Yantai, China," ICTSI said.
DP World China (Yantai) will retain a 12.5 percent equity interest in YICT and the balance of 36.5 percent equity interest in YICT will be owned by Yantai Port Holdings (YPH).
YICT will become the only foreign container terminal within the Zhifu Bay Port area, with ICTSI as the majority shareholder.
The consideration for the acquisition of 51 percent of YICT by ICTSI will be paid in four instalments and will be partially funded from the sale of ICTSI's 60 percent equity interest in YRDICTL to YPH.
Arising out of the basic requirements for "bonded operations" within the Yantai bonded port zone (Yantai Port) in Shandong Province, the major container operators within Yantai Port agreed to consolidate container operations.
This will allow it to achieve synergy in the allocation of resources, improve economies of scale by separating the local and foreign container handling operations, and upgrade the professional level of the container operations of the Yantai Port as a whole.
DP World Yantai is a sino-foreign equity joint venture company between Yantai Port Group, Yantai Port Holdings and DP World China (Yantai) to operate a container, bulk, and roll-on-roll-off cargo terminal, and manage bonded warehousing and short-distance transport within the area of the Yantai Port.
It operates Berths no. 51, 52, 61 & 62 within Yantai Port with a total land area of 76.7 hectares, a combined length of 1,300m and a controlling depth of up to 16m.
YRDICTL is a sino-foreign equity joint venture between ICTSI and Yantai Port Holdings to operate in Yantai Port.
YRDICTL's terminal covers a total land area of 28.2 hectares. It operates Berths 38 and 39 in Yantai Port, with a combined length of 730m and controlling depth of 14m.
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