Dubai's DP World has boosted its cash reserves by billions of Hong Kong dollars after two separate deals yesterday involving its facilities at Hong Kong's Kwai Tsing container port. One was a container terminal disposal to Hutchison Port Holdings Trust, while the other was with Australian property giant Goodman.
DP World said it would receive a total of US$742 million including the repayment of shareholder loans from the two deals, while the net gain is expected to be about US$151 million.
Hutchison agreed to pay HK$3.17 billion to acquire Asia Container Terminals Holdings, which operates container terminal 8 West. The deal will enable the Singapore-listed trust to combine operations at CT8 (West) and CT8 (East), which it already owns through Cosco-HIT.
Under the deal, Hutchison will acquire 355 shares from DP World ACT Holdings, 350 shares from PSA China and 295 shares from DP World 8, which is jointly owned by DP World and PSA International, the Singapore container terminal company. Overall, DP World had a 55 per cent stake in CT8 West, while PSA had a 45 per cent interest.
The trust also agreed to pay HK$750 million to repay existing debt owed by the ACT Holdings group to the affiliates of DP World and PSA. The trust is financing the deal from a HK$4 billion term loan agreement dated yesterday.
CT8 West has two container berths totalling 740 metres that handled 1 million teu (20-foot equivalent units) last year against total handling capacity of 1.4 million teu. One source said DP World was anxious to sell because it felt the terminal was underperforming.
Cosco-HIT's CT8 East has two berths with a total quay length of 640 metres with a further sea frontage of 448 metres for barges.
Barclays analysts Jon Windham and Esme Pau said it was "a good, small acquisition".
Separately, Goodman Hong Kong Logistics Fund paid HK$3.5 billion to buy 75 per cent of DP World Asia, which gives Goodman 25 per cent ownership of the ATL Logistics Centre Hong Kong and partial ownership of CSX World Terminals Hong Kong.
Philip Pearce, Goodman managing director for Greater China, said it offered to pay for the full 100 per cent interest, but DP World wanted to keep 25 per cent to maintain a Hong Kong presence.