MOSCOW. Sept 2 (Interfax) - Global Ports Investments has announced the securing of binding agreements concerning its acquisition of 100% of National Container Company (NCC), a Global Ports statement says.
The purchase price will be $291 million in cash and newly issued stock amounting to around 18% of increased Global Ports share capital to be issued to Ilibrinio Establishment Limited and Polozio Enterprises Limited, the sellers, in equal proportions. The market value of 18% of shares is $361 million, based on a London Stock Exchange GDR price of $10.5 as of August 30.
The deal also includes a call option for Global Ports to acquire 50% of Ilichevsk Container Terminal (CTI) for the strike price of $60 million from NCC Group's current shareholders. The term of the call option is three years following the closing of the deal. CTI, located on the Black Sea, has about a 30% share of the Ukrainian container handling market.
As part of the deal, at closing the sellers will transfer loans provided to their related parties by NCC Group to Global Ports in the amount of $568.2 million and the interest accrued for the period from December 31, 2012 until the closing. In addition, $155 million of loans outstanding from the related parties of the sellers as of December 31, 2012 together with $17 million of further loans advanced during 2013 and all accrued interest are to be set off against noncash dividends to be declared by NCC Group, the statement said.
The sellers are expected to receive two seats on the board of directors without any special voting or veto rights. The sellers will be subject to certain non-compete restrictions for as long as they have rights to board representation and will cease to be entitled to board representation if they sell any of the interests in the company they received as a consideration in the transaction. The non-compete restrictions will remain in effect for a two year period after the sellers cease to have board representation.
All the Global Ports shares received by the sellers as payment in the deal, representing about 18% of Global Ports' enlarged share capital, will be locked up for six months following completion. This lock up will extend for an additional 18 months with respect to a portion of such of shares, representing about 10% of Global Ports' enlarged share capital. Transportation Investments Holding Limited (TIHL) and APM Terminals B.V. (APM Terminals) have preemptive rights over any sellers' disposals of these shares.
The increase in Global Ports' authorized share capital is subject to approval at an extraordinary general meeting to be held on September 27.
The cash portion of the deal will be financed through bank financing, Global Ports said. "The transaction is expected to be complete by the end of 2013, subject to customary conditions precedent, including regulatory approvals and the issuance of a prospectus for the enlarged Global Ports Group approved by the UK Listing Authority," the company said.
After the acquisition of NCC, Global Ports will have some 1.12 TEU (twenty-foot equivalent units) of free capacity, making it possible to the group's capital expenditures over the next several years, the company said. NCC is Russia's second-largest container port operator, with terminals in Russia and Ukraine. The company owns the First Container Terminal at the St. Petersburg port, the Ust-Luga Container Terminal at the Ust-Luga port and Container Terminal Ilyichevsk in Ukraine. Several years ago, NCC launched a dry port in Shushary, outside St. Petersburg with throughput capacity of 200,000 TEU (20-foot equivalent units).
NCC terminals had total freight turnover of 1.38 million TEU in 2012, and freight turnover in the first four months of 2013 amounted to 363,600 TEU.
NNC made sales revenues of $253 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $164 in 2012.
The group First Quantum and Russian entrepreneur Andrei Kozar hold equal stakes in NCC.
Global Ports operates three container terminals, in St. Petersburg and Nakhodka, two in Finland and the Yanino logistics facility near St. Petersburg. N-Trans and APM Terminals share 50-50 ownership of a 75% stake in Global Ports. The other 25% of shares is in free float.
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