INTERNATIONAL Container Terminal Services, Inc. (ICTSI) has completed a P10-billion deal to acquire a Brazil-based firm, which holds the concession to operate a container terminal in the Port of Rio de Janeiro.
In a disclosure to the stock exchange Monday, the Razon-led port operator said its wholly owned subsidiary ICTSI Americas B.V. inked last Friday the share purchase agreement with Boreal Empreendimentos e Participacoes S.A. (Boreal) to acquire 100% of Libra Terminal Rio S.A. (Libra Rio).
Under the deal, ICTSI will acquire 272,058,824 shares of Libra Rio, priced at 2.72 Brazilian Reais (about P37.09) per share or a total of 740 million Brazilian Reais (around P10.1 billion).
“The amount of the consideration was negotiated and determined on a ‘cash-free, debt-free’ basis through a discounted cash flow method… The purchase price will be entirely paid in cash on closing,” it said.
Libra Rio holds the concession to operate, manage and develop Terminal de Conteineres 1 (T1Rio) in Rio de Janeiro, Brazil. Boreal is a wholly owned subsidiary of the Libra Group, under which is Libra Rio.
“The Share Purchase Agreement…was executed after a public auction of Libra Rio, held on 17 July 2019 and won by ICTSI, required as part of Libra Group’s Judicial Reorganization process led by the 2nd Special Lower Court for Business Restructuring and Insolvency in Sao Paulo, Brazil,” the company said.
“Under Brazilian bankruptcy law, ICTSI (acquired) Libra Rio as an isolated operation unit, free and clear of any liabilities or contingencies of any other entities of Libra Group,” it added.
With the acquisition, ICTSI is set to continue the concession of Libra Rio over T1Rio, which will expire on 2048.
“Transfer of the facilities to ICTSI management is expected to take place late 2019, once all conditions precedent and all required regulatory approvals have been obtained,” the listed firm said.
Once ICTSI completes the takeover of T1Rio, it will be the second terminal the Razon-led firm will operate in Brazil, the other being Suape Container Terminal at the Port of Suape.
Its footprint in Latin America also covers operations in terminals at the Port of Guayaquil in Ecuador, Port of La Plata in Buenos Aires, Argentina; Port of Manzanillo and Port of Tuxpan in Mexico; Port of Buenaventura in Colombia and Puerto Cortes in Honduras.
ICTSI booked an attributable net income of $72.4 million in the first quarter, up 77% on the back of higher operating income and lower financing charges during the period.
It is allocating $380 million for capital expenditures in 2019 to fund its acquisition of new equipment, maintenance work and expansion in Manila, Mexico and Iraq. — Denise A. Valdez