ICTSI to invest $95M in Pakistan project

Razon-led port operator International Container Terminal Services Inc. expects to invest about $95 million to acquire up to 55 percent of Pakistan International Container Terminal Ltd. (PICT), a container cargo terminal operator at Pakistan’s Karachi Port.

ICTSI, through offshore unit ICTSI Mauritius Ltd., launched at the Karachi Stock Exchange (KSE) on Friday a tender offer to acquire all the shares of the publicly listed PICT at a price of 150 Pakistan rupees a share (about P66.50). The tender offer will expire on October 10 in Pakistan unless extended, ICTSI disclosed to the Philippine Stock Exchange.

In an interview, ICTSI treasurer Rafael Consing Jr. said the group was expecting to gain control of 55 percent of PICT after the tender offer. A 35-percent block had already been committed to ICTSI by the existing majority shareholder in a deal signed in March but with the tender offer, ICTSI could increase its interest to as much as 55 percent.

While the tender offer would cover all shares of PICT, Consing said ICTSI’s joint-venture partner—a local group named Premier Mercantile Services (Pvt) Ltd. (which is the current majority owner)—would keep a 40-percent stake. This would leave PICT with an assumed public float of 5 percent on the KSE.

“Assuming we are able to buy a total of 55 percent of PICT’s capital stock, we expect to invest approximately $95 million,” Consing said. The ICTSI group made the offer to purchase the remaining shares of PICT in accordance with takeover laws of Pakistan.

Premier Mercantile was awarded a 21-year concession to build and operate a dedicated container terminal at Berths 6-9 in Karachi Port in April 2002. PICT was afterwards formed as the terminal operating company and took over dedicated container terminals in October 2002.

PICT is a container cargo terminal with a maximum handling capacity of 750,000 twenty-foot equivalent (TEU) container units. For the fiscal year ending June 30, it handled a total of 669,806 TEUs, equivalent to an 11-percent growth at an implied utilization rate of 89 percent.

ICTSI, led by business tycoon Enrique Razon Jr., is a leading port management company involved in the operations and development of 24 marine terminals and port projects in 17 countries. It was among the first international terminal operators to expand globally, establishing a good track record in various economies privatizing port operations.

On Friday, ICTSI sealed a new contract to develop and run a major container terminal in Nigeria’s Lagos free trade zone, which is expected to be the largest terminal in sub-Saharan Africa once operational in 2016.