International Container Terminal Services Inc., a listed ports operator owned by billionaire Enrique Razon Jr., is pursuing the development of a port in Colombia, South America, after finalizing a joint venture deal with its partner, PSA International Ltd.
Documents filed in the Philippine Stock Exchange showed that ICTSI signed an agreement with PSA International to build and operate the container port terminal and ancillary facilities at the Aguadulce Port Project.
PSA International operates ports in Asia, Europe and Americas, with flagship operations in Singapore and Antwerp.
“The agreement involves PSA’s investment in Sociedad Puerto Industrial Aguadulce S.A., an indirect subsidiary of ICTSI, which holds the 30-year concession for the Aguadulce Port Project.
Based on the terms of the deal, ICTSI units Kinston Enterprises Corp. and Future Water S.A allowed PSA Colombia Pacific Pte. Ltd. to acquire 45.64 percent of Sociedad Puerto Industrial. The deal was still subject to certain conditions, ICTSI said in the filing without elaborating.
Upon the completion of the agreement, ICTSI and PSA, through their respective units, will jointly own 91.28 percent of the venture.
“ICTSI and PSA will thereafter work jointly toward the success of the Aguadulce Port Project,” ICTSI said.
“PSA and ICTSI share the same aspirations for the Aguadulce Port Project and the opportunity to bring this shared goal to fruition presented itself,” Razon, who sits as ICTSI chair and president, said in the same filing.
Tan Chong Meng, PSA Group CEO, said the partnership would support “the growing demand for trade and logistics in Colombia, amidst the improving business environment in the region”.
Cross-border investments in emerging markets have been a key part of ICTSI’s growth strategy.
The company earlier noted that it budgeted $550 million for capital spending this year mainly to complete terminal development projects in Argentina and Mexico and to ramp up expansion in Colombia and Davao, Mindanao.
The company operates seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan, which account for a combined 85 percent of consolidated revenues.
ICTSI reported earlier that profit rose in the first half of 2013 on higher revenue and as it noted margin improvements for certain key terminals abroad.