Russia's Global Ports Buys Container Terminal Firm NCC
London-listed Russian ports operator Global Ports has bought domestic rival National Container Company (NCC) in a deal worth almost $1.6 billion, becoming one of the world's top 20 container operators.
Global Ports said the deal to buy NCC would enable it to streamline its business and capitalise on Russia's robust container market, which grew 7 percent between January and July, one of the fastest rates globally.
"The result of this transaction will be a bigger, stronger, more profitable company with a very comfortable level of leverage, continuing to pay very tangible dividends," CEO Alexander Nazarchuk told Reuters in a telephone interview.
Under the deal, Global Ports agreed to pay $291 million in cash, as well as new shares amounting to around 18 percent of its own enlarged share capital, worth around $360 million as of Friday's close.
Together with the assumed net debt of NCC, which owns container terminals and a dry port in the St Petersburg area, the total value of the deal is worth about $1.56 billion.
The takeover had been in the works for some months.
The deal was backed by Global Ports' main shareholder, APM Terminals, the ports arm of Danish shipping group A.P. Moller-Maersk, which bought a 37.5 percent stake in Global Ports a year ago from holding company N-Trans.
"Russia is a very important strategic market with long-term natural growth due to strong fundamentals, natural resources, a growing middle-class and the increased containerisation ratio we expect to see," Kim Fejfer, chief executive of APM, said on the same call.
The containerisation level - a ratio of the number of containers per capita - is low in Russia at 41, compared to 93 for Turkey, a level of 132 for the United States and 168 for the European Union.
The NCC deal makes Global Ports the leading terminal operator in Eastern Europe, with combined throughput of 2.5 million tonnes and 1 million tonnes of additional available capacity.
N-Trans, founded by Russian businessmen Nikita Mishin, Konstantin Nikolaev and Andrey Filatov, owned 37.5 percent of Global Ports before the NCC deal. The other 25 percent is in free float.
Global Ports' London-listed proxy shares rose 2.9 percent after the news.
By Alessandra Prentice; Copyright Reuters 2013.
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