MANILA, Philippines – Tycoon Enrique Razon's International Container Terminal Services Inc. (ICTSI) is consolidating its port operations in China.
In a disclosure to the Philippine stock exchange, the port operator said the Ministry of Commerce-Shandong Province of China has approved its indirect wholly-owned subsidiary ICTSI (Hong Kong) to acquire 51 percent of DP World Yantai Company Limited, which will be renamed Yantai International Container Terminals Limited (YICT).
DP World China (Yantai) Limited will retain a 12.5 percent equity interest in YICT while the remaining 36.5 percent equity interest in YICT will be owned by Yantai Port Holdings Company Limited (YPH).
ICTSI has also received approval to sell its entire 60 percent equity interest in Yantai Rising Dragon International Container Terminals Ltd (YRDICTL).
YPH will then become the 100 percent owner of YRDICTL and will dedicate it to handling local container cargo.
The consideration for the acquisition of 51 percent of YICT by ICTSI will be paid in four installments and will be partially funded from the sale of ICTSI’s interest in YRDICTL.
“The objective of these transactions is to consolidate and optimize the overall port operations within the Zhifu Bay Port area in Yantai, China,” ICTSI said.
The port operator added that major container operators within Yantai Port agreed to consolidate container operations “to achieve synergy in the allocation of resources, improve economies of scale by separating the local and foreign container handling operations, and upgrade the professional level of the container operations of the Yantai Port as a whole.”