DP World in advanced talks on MIP-backed port

17 April 2019 - 12:00 am UTC

DP World has emerged as the front-runner to acquire a part of Macquarie Infrastructure Partners (MIP) North American ports business, said two sources familiar with the situation.

Singapore-based shipper company, PSA Corporation Ltd, has also emerged as an interested bidder for some of the assets, added a third source familiar with the situation.

MIP hired Evercore in the 2H18 to sell the infrastructure fund’s three ports assets: Penn Terminals in the US and Fraser Surrey Docks and Halterm Ltd. in Canada.

DP World is considered the front-runner for Fraser Surrey in British Columbia, and the Singapore-listed PSA is in talks for Halterm and Penn Terminals. Both parties are in exclusive talks for those assets.

DP World has exposure in the region as it owns Canadian container terminals in Vancouver and Prince Rupert. In 2016, CDPQ acquired a combined 45% of the assets through a CAD 865m (USD 640m) investment. The duo set up a CAD 5bn fund to invest in ports and terminals outside the United Arabs Emirates as part of this arrangement.

Fraser Surrey has been hindered by its ability to handle ships of considerable size against the larger Deltaport in the region.

PSA’s only North American owned port is inland-facility Ashcroft Terminal, which lies 300km (186.4 miles) east of Port of Vancouver, according to a company website.

Halterm was considered the most modern of the bunch with water depth on approach and depth and throughput or maximum production capacity of 750,000 containers. Separately, Penn Terminals is vying with the Port of Wilmington, which is in the midst of a USD 600m upgrade thanks to a 50-year concession agreement it signed with the Port of Delaware.

Collectively, the assets are forecasted for USD 55m in 2018 and USD 63m in 2019 in EBITDA. These are the last three assets in MIP I.

MIP declined comment on the situation. DP World and PSA did not return calls seeking comment. 

 

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