Global Ports Investments Buys NCC Group

Published Jan 2, 2014 6:16 PM by The Maritime Executive

Global Ports Investments has completed the acquisition of 100 per cent of the share capital of NCC Group in a transaction which was announced on 2 September 2013.

The acquisition of NCC Group, the second largest container terminals operator in Russia, strengthens Global Ports leading position in the growing Russian container market. The enlarged Global Ports will operate nine container terminals, with a total marine container handling capacity of approximately four million TEUs (as of 30 June 2013), located in both the Baltic Sea and Far East Basins which are key gateways for Russian container cargo. The enlarged group is now the largest container terminal operator in Eastern Europe and one of the top-20 container operators globally.

The transaction provides potential for greater operational efficiency through improved terminal network management. The combination of NCC Group and Global Ports will enable shipping line customers to benefit from network savings through improved call rationalization, better berth utilization and enhanced productivity. The transaction creates a basis for the enlarged group to reduce overhead costs as well as to centralize support functions. The enlarged group will have approximately 1.12 million TEUs of available capacity enabling it to accommodate future throughput growth while reducing the groups capital expenditure.

Global Ports has elaborated a detailed plan for the integration of NCC Group based on applying best practices and leveraging the wealth of expertise and experience of both businesses. The Group's management believes that the integration of NCC Group into Global Ports operations will be smooth and will enable the combined business to offer added value to the group’s customers.

To finance the acquisition, the Group has raised USD 238 million under a secured term loan agreement. In addition, the terms for some of NCC Group's existing debt portfolio have been renegotiated. As a result, the average interest rate of NCC Groups loan portfolio is expected to decrease creating synergies shortly after acquisition.

On completion of the transaction on 27 December 2013 the company’s share capital was increased to 573,170,731 shares through an issue of additional 103,170,730 shares6 to the Sellers. The post-Transaction shareholder structure of the enlarged Global Ports is now as follows:
N-Trans: 30.75 per cent;
APM Terminals: 30.75 per cent;
Free float: 20.5 per cent;
Ilibrinio Establishment Limited: 9 per cent;
Polozio Enterprises Limited: 9 per cent.

Nikita Mishin, chairman of Global Ports, commented: “We are delighted to have completed such an important transaction, one that is an historic step for Global Ports, and which moves the Group into the big league of major global container terminal operators. Our combined group will hold an enviable position in the high-growth Russian container market and will have an unrivalled ability to provide the best quality of service to our customers. Over the next 12 months we will focus both on integrating NCC into our Group in order to realize the synergy potential of the transaction as well as on the swift deleveraging of our balance sheet.”