OOIL to take first China port project
Consortium to build and operate US$200m Tianjin complex
The Tung family's Orient Overseas (International) Ltd (OOIL) is about to acquire its first stake in a mainland container port as part of a joint-venture company that will build, manage and operate a new terminal complex in Tianjin.
OOIL, whose flagship is Orient Overseas Container Lines, will join Singapore's PSA International, Britain's P&O Nedlloyd and Shanghai-listed Tianjin Port Group in a US$200 million extension scheduled to start next year.
'The shareholding structure has been agreed,' said a source close to the deal. 'We are just waiting for some of the listed firms to gain approval from their shareholders.'
OOIL also emerged yesterday as one of the three Hong Kong companies in talks to take part in a nine-berth expansion of the port of Ningbo, tipped last week by a senior official from the Ningbo Port Group.
The official said the proposed project, on Ningbo's Chuangshan shoreline, would require a US$1.05 billion investment with the initial berths coming on line by 2007.
The Tianjin and Ningbo contracts are expected to be signed next month, according to mainland officials close to the deals.
The Tianjin deal will finally secure state-owned PSA's foothold in the northern mainland port after its first effort was beaten last week by Dubai Ports International, which won the bid for the global port assets of United States rail giant CSX Corp, including two berths in the industrial city on the Bohai Bay.
PSA also had its dream of expanding its presence in Hong Kong scuttled by the Dubai bid, and local executives said yesterday it might now be excluded from Kwai Chung completely.
PSA last month agreed to pay Sun Hung Kai Properties $2.3 billion for its 57 per cent interest in Asia Container Terminals, which owns and operates the two berths at Container Terminal 8 West.
But it is understood that the original ACT shareholders - NWS Holdings and CSX World Terminals - are preparing to exercise their options to match the offer by the December 20 deadline, closing the door on PSA.
If both match, SHKP's stake will be split proportionately between the two players according to their shareholding in ACT.
OOIL, PSA and P&O will all take 20 per cent stakes in the Tianjin venture, which will be tasked with extending the port's waterfront by 1.1km, enough for three or four berths.
OOIL declined to comment on the Tianjin deal yesterday, as did a PSA corporate spokesman in Singapore. NWS and CSX executives could not be reached.
Tianjin will be OOIL's first foothold in the mainland port sector, a goal laid out two months ago by chairman Tung Chee-chen.
US$200 million Tianjin port extension due to start next year
OOIL, PSA and P&O will take 20 per cent stakes in the venture
PSA's dreams of Hong Kong expansion may be in tatters