ICTSI taking over Indonesian port

MANILA, Philippines — Razon-led International Container Terminal Services Inc. (ICTSI) will spend $46.5 million to acquire majority control in a firm managing a multipurpose terminal in East Java, Indonesia.

ICTSI informed the Philippine Stock Exchange that it has entered into a conditional share subscription and purchase agreement with Indo Port Holding Pte. Ltd. and Eastlog Holding Pte. Ltd.

The deal will result in ICTSI acquiring majority ownership in PT East Java Development, which has the concession rights to operate a multipurpose terminal in Lamongan Regency in East Java. The firm has 47 years remaining in its concession.

ICTSI said it would obtain in PT East Java Development one million worth of shares equivalent to 66.7 percent of outstanding shares in the terminal concessionaire. The port manager will buy the shares at $46.5 a piece for a total of $46.5 million, or nearly P2.6 billion.

ICTSI said the transaction amount was negotiated by the parties and was determined based on a discounted cash flow method.

The purchase price will be settled in cash in multiple tranches until 2023.

“The purchase will increase ICTSI’s footprint within the growing Asia-Pacific region and provide further service offerings to its global and local customers,” ICTSI said.

ICTSI was recently named by maritime expert Drewry as the largest wholly independent port operator in the world, with presence across six continents. The port operator was also ranked as the eighth top global terminal operator (GTO) worldwide.

Likewise, Drewry said ICTSI and logistics giant Hamburger Hafen und Logistik AG recorded the highest equity level across their business. Based on records, GTOs, including ICTSI, facilitated more than two-thirds of the global port volume at the height of the pandemic in 2020.

ICTSI chairman Enrique Razon Jr. earlier said the firm would pursue expansion projects even as the world economy faces yet another crisis with Russia’s invasion of Ukraine.