• Sells 47.7 % Equity To Chinese Firm
About four years after government handed over the nation’s seaports to private terminal operators, a major upset was recorded last week following the divestment of a major investor in one of the leading terminals in Lagos.
Israeli-owned Zim Integrated Shipping Limited; a partner in the concessioned Tin Can Island Container Terminal (TICT) announced that it has sold its 47.5 per cent equity in the Lagos container port to a joint venture of China Merchants; the China Direct Investments Limited and the China-Africa Development Fund for a whopping $154 million.
The Chinese port operator said in a statement that the Chinese consortium will own 60 per cent of the new TICT equity while China-Africa Development Fund takes a 40 per cent stake after obtaining approval from Chinese regulators.
China Development Bank owns CADF a fund which supports Chinese enterprises in their investment in Africa.
By that singular deal which caught many napping, Zim will gross a profit of $120 million on the sale of the strategic equity in TICT. TICT is arguably Nigeria’s second largest container terminal.
However, as part of the deal, Zim is expected to sign a 10-year port of call agreement with TICT and sell additional rights in connection with the asset. Zim’s partner in the container terminal is Bollore Logistics Africa, a unit of Paris-based Group Bollore SA (Euronext: BOL).
Zim said that the sale was part of its long-term business plan. The sale was brought forward from its originally planned closing in 2011.
Investigations revealed that the journey to last week’s sale actually started in July when ZIM signed a 10-year agreement that will give CMHI and CADF additional rights in connection with vessel call operations at TICT. By the agreement also, Zim’s vessels will continue to call at TICT for the next 10 years. And to finally seal the deal, the joint venture agreement between CMHI and CADF was signed on November 5, 2010.
The Tin Can Island Container Terminal has three berths, with a capacity of 360,000 TEU containers per year. A fourth berth is being upgraded, which will increase the terminal’s capacity to 400,000 TEU per year.
The Israeli firm has extensive commercial activities in Nigeria, and operates a number of shipping lines, connecting Asia, Europe and the United States, to Nigeria, as well as a fully owned shipping and logistics agency in Lagos.
Reacting to the development, Zim’s president and CEO Rafi Danieli said,his company " operates on a wide scale in the trade between Asia, Europe and the United States, to Nigeria. In recent years ZIM made significant investments to develop the terminal, bringing it to commercial success. The structure of the current deal ensures the continued partnership between Zim and TICT for many years to come, and Zim’s customers will continue to enjoy the highest levels of service in Nigeria."
Danieli added that the proceeds from the sale would enable the company to develop and expand its shipping transportation activities in the international lines in Asia, North America and Europe.
Shipping Position Weekly made frantic, but unsuccessful efforts to speak with the managing director, TICT Mr Kotik Yehuda on the sale and its likely effect on the company.
He indeed answered our telephone calls, and actually sought to speak with our correspondent in person and not via the telephone, this could however not be accomplished as neither could keep the appointment.
An e-mail that was sent to him on the issue was not replied to as at press time.
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