RSGT announces completion of USD 280 million equity sale to PIF & COSCO SHIPPING Ports Limited
Jeddah, Saudi Arabia June 2021 – Upon completing all necessary conditions and obtaining all regulatory approvals, the founding shareholders of Red Sea Gateway Terminal Limited (RSGT) have officially completed their 40% RSGT equity sale to the Public Investment Fund (PIF) and COSCO SHIPPING Ports Limited (CSPL) (20% each). The transactions imply an enterprise value for RSGT of USD 880 million and a total gross inflow of equity value for the founding shareholders USD 280 million. The founding shareholders will reduce their combined shareholding to 60%.
PIF is the economic engine of Vision 2030, driving the diversification of Saudi Arabia’s economy. The investment in RSGT is in line with PIF’s 2021-2025 strategy that focuses on 13 key priority sectors, including Transport and Logistics. The location is on the main East-West trade routes, with close proximity to the main cargo end destinations on the West Coast of Saudi Arabia and captures significant intra-Red Sea trans-shipment cargo volumes. The investment will help to transform RSGT into both a regional and global logistics hub in line with PIF’s mission of unlocking new economic opportunities locally and globally.
RSGT will benefit and enhance its value proposition with the support of a leading global ports operator like CSPL, which will bring new momentum to the growth of RSGT’s business volume. Both new shareholders will help drive future growth on seaside and landside logistics.
Jens O. Floe, CEO of RSGT, said, “This is a significant milestone for RSGT, demonstrating both our strength and confidence which the industry and investment community have in our strategic planning and implementation. Working closely with PIF and CSPL, we will accelerate our shared vision, further strengthen our customer offering, and elevate our mandate to meet the increasing demand for terminal and logistics services. RSGT will continue to focus on developing a niche emerging market operator with a keen focus on ports in the Red Sea and East Africa.”
Having commenced operation in 2009, RSGT is located at the world-class Jeddah Islamic Port, a crucial logistics hub serving as a global trade nexus linking Asia, Europe, and Africa, as well as an increasingly important regional business center.
Moreover, RSGT continues to bring excellence to the trade with the 30-year concession (“BOT agreement”) with Saudi Arabian Ports Authority (“Mawani”) – announced in late 2019 and commenced in April 2020. RSGT assumed the operations of the North Container Terminal in Jeddah Islamic Port and has significantly expanded its handling capacity from 2.5 million TEU to 5.2 million TEU, becoming the largest container terminal in KSA. Throughout the concession period, RSGT’s annual throughput capacity is envisaged to grow to about 9 million TEU following an investment plan of USD 1.7 billion in infrastructure, equipment, and technology.
RSGT will remain an independent terminal operator, servicing its customers across the global logistics chain. It will also continue to focus on the development, construction, operation, and maintenance of port terminals and on logistics services.
“Moving forward, a key element of RSGT’s ongoing development plan, beyond domestic and targeted international expansion, is to further develop our modern port and supply chain facilities enabling us to better meet the needs of our global and local customers”, added Jens O. Floe.
RSGT was established in 2006 as Saudi Arabia’s first private sector Build-Operate-Transfer project. Located at Jeddah Islamic Port, RSGT provides world-class integrated logistics solutions, which serve as an engine of growth for local and regional economies. More information can be found at www.rsgt.com
Media Contact: Communication@rsgt.com
The Public Investment Fund is one of the largest and most impactful sovereign wealth funds in the world, driving the economic transformation of Saudi Arabia for the benefit of its people while helping shape the future global economy. PIF is building a world-class portfolio through investments in attractive, long-term opportunities across diverse industries and asset classes internationally, while unlocking new sectors at home. PIF works alongside global strategic partners and renowned investment managers, and acts as the Kingdom of Saudi Arabia’s primary investment arm aiming toward generating long-term value for the Kingdom of Saudi Arabia in line with Vision 2030. More information can be found at www.pif.gov.sa
Media contact: Media@pif.gov.sa
CSPL is a leading global port operator with a portfolio of terminals located at the five main port regions of Mainland China, Southeast Asia, the Middle East, Europe, South America, and the Mediterranean. As at 31 March 2021, COSCO SHIPPING Ports operated and managed 357 berths at 36 ports worldwide, of which 210 were for containers, with a combined annual handling capacity of 118 million TEU. COSCO SHIPPING Ports has adopted “The Ports for ALL” as its mission and is working towards building a global terminal network with controlling stake that offers linkage effects on costs, services and synergies, a synergistic platform that offers mutual benefits to all in the shipping industry, connecting global routes and becoming truly “the ports for all people”. More information can be found at //ports.coscoshipping.com/en/
Media contact: email@example.com
J.P. Morgan acted as the sole financial advisor and Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited acted as the legal advisor to the Founding Shareholders on the transactions.
HSBC SA acted as the sole financial advisor to PIF and Freshfields Bruckhaus Deringer LLP in association with the Law Firm of Salah Al-Hejailan acted as the sole legal advisor to PIF on the transaction.