China Merchants Group´s port arm has announced an agreement to acquire a stake in 10 terminals from CMA CGM.
China Merchants Port Holdings Co. owns a 49% stake in Terminal Link - a joint venture with CMA CGM. In the current transaction, China Merchants Port will buy US$ 468 million of convertible bonds issued by the joint venture and will loan US$ 500 million to CMA CGM.
According to a memorandum, CMA CGM will repay the loan in eight years in the form of capital increase in the joint venture, while China Merchants Port will have to convert the bond into equity in the joint venture. The parties will maintain their 49% and 51% stakes in Terminal Link.
China Merchants Port acquired the 49% stake in the former wholly-owned unit of CMA CGM in 2013 for about US$ 440 million. Terminal Link currently owns and operates 13 container terminals worldwide. It posted a net profit of US$ 25.3 million for the first half of 2019. The 10 terminals, located in Europe, Southeast Asia and the Americas, will further enhance its container volume and market share in overseas terminals.
CMA CGM S.A. is a French shipping and container transport company. It is one of the largest companies in container transport, operating 200 sea routes between 400 ports in 150 different countries. It has European headquarters in Marseille, and North American headquarters in Norfolk, Virginia.