PICT takeover: ‘See it as a joint venture, not takeover, says director

Global port operator set to acquire 55% stake.


Our Correspondent August 16, 2012
PICT takeover: ‘See it as a joint venture, not takeover, says director

KARACHI: Despite the plan of global port operator, International Container Terminal Services Inc (ICTSI) to increase its share in Pakistan International Container Terminal (PICT) to 55%, Director Aasim A Siddiqui said the multi-million-dollar investment should be seen as a joint venture instead of a takeover.

He also said  that this was in the best interest of the shareholders.

ICTSI has already launched a public-sector offer at the Karachi Stock Exchange (KSE) to purchase shares in PICT at a price of Rs150 per share, according to a statement released by PICT on Wednesday.

Talking to The Express Tribune, Siddiqui said ICTSI was likely to become the majority shareholder in PICT once the tender offer expired on October 10. The mandatory tender offer is being made pursuant to the definitive Share Purchase Agreement between ICTSI and controlling shareholders of PICT for the acquisition of up to 35% outstanding shares.

Currently, Premier Mercantile Services, ICTSI and ordinary shareholders have 40%, 35% and 25% stake in PICT. Through the tender offer, ICTSI aims to buy up to 20% shares from the stock market. ICTSI’s acquisition of up to 55% stake in PICT will result in net foreign investment of approximately $95 million.

ICTSI is a port management company involved in operations and development of 24 marine terminals and port projects in 17 countries. In 2011, it had earnings before interest, taxes, depreciation and amortisation (EBITDA) of $665 million. Currently, it has a market capitalisation of over $3 billion.

PICT started terminal operations at the Karachi Port in 2002. Its market capitalisation is roughly $180 million.

“Competition has increased globally and our rivals are big, multinational companies. So our board decided to have a joint venture with an international company of repute. We got an attractive price and the deal is in the interest of shareholders,” Siddiqui said, adding ICTSI would also bring technical expertise to Pakistan.

Talking to journalists, ICTSI Vice President Rafael D Consing said PICT had growth potential and his company would provide it with capital as well as technical expertise should PICT decide to expand its operations. “There’ll be two-way transfer of technology. We have a lot to learn from PICT.”

ICTSI has made international investments of $1 billion in the last four years, he stated, adding another billion-dollar investment was expected in the next two to three years.

Published in The Express Tribune, August 16th, 2012.

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