International port handler acquires 35% of PICT

Conditions precedent to completion of deal have finally been fulfilled.

KARACHI:

Nearly seven months after signing a definitive Share Purchase Agreement (SPA) with its major shareholders, Philippines-based International Container Terminal Services Inc Mauritius Limited (ICTSIML) has completed the acquisition of up to 35% of outstanding shares in Pakistan International Container Terminal (PICT).

According to a statement recently released by ICTSIML – which is a wholly-owned subsidiary of the International Container Terminal Services Inc (ICTSI) – the deal materialised nearly seven months after the SPA, which was signed on March 30.

The SPA was subject to the fulfilment of certain conditions: namely, issuance of consent from PICT’s lenders; fulfilment of certain pre-completion covenants by the selling shareholders; clearance from relevant government agencies in Pakistan; non-occurrence of any material adverse change; determination that the warranties from the selling shareholders are correct in all material respects; and compliance with the Pakistan Takeover Laws.

According to ICTSIML, all conditions precedent to the completion of the acquisition, as stipulated in the SPA, have finally been fulfilled and the ICTSIML now owns 35% of PICT’s total issued capital.

Tender offer

Other than acquiring a 35% share in the PICT under the SPA, the ICTSIML had also made a ‘tender offer’ to PICT to purchase 25% ordinary shares at a price of Rs150 per share. The mandatory tender offer became effective on August 10 and expired on October 10.

There was no response from ICTSIML when The Express Tribune asked its spokesperson about the number of shares ICTSIML managed to purchase under the tender offer on the Karachi Stock Exchange (KSE).

However, in an interview with The Express Tribune in August, PICT Director Aasim A Siddiqui had stated that the Philippines-based company was expected to buy up to 20% shares in PICT under the tender offer. Siddiqui had noted that the acquisition of a 55% stake in the company under the SPA as well as the tender offer would result in net foreign investment of approximately $95 million.

A spokesman for PICT told The Express Tribune on Wednesday that company officials were scheduled to meet investment bankers from Citibank – the financial adviser in this deal – within the next couple of days to determine the final shareholding structure of PICT.

PICT is a container cargo terminal located at the Karachi port with a maximum handling capacity of 75,000 twenty-foot equivalent units. According to financial results sent to the KSE last Monday, PICT’s profit-after-tax increased to Rs390.8 million in the quarter that ended on September 30, compared to Rs318.1 million earned in the corresponding quarter in 2011, showing an increase of 22.8%.

Published in The Express Tribune, October 25^th, 2012.