ICTSI exits China’s Yantai port terminal 

Tycoon Enrique Razon Jr.’s International Container Terminal Services, Inc. (ICTSI) is exiting its port venture in China after 20 years, selling its controlling stake in Yantai International Container Terminal Ltd. (YICTL) for about $112 million.

In a disclosure to the local bourse on Monday, the global ports operator said its wholly owned subsidiary, ICTSI (Hong Kong) Ltd., had signed an equity interest transfer agreement with Yantai Port Holdings Company Limited for the sale of its 51-percent equity interest in YICTL.

Under the deal, ICTSI will sell 384.54 million shares at RMB2.01 each for total consideration of RMB773.21 million, or roughly $112 million. The company said the price was based on an appraised value determined by an independent appraiser.

ICTSI said the sale would allow it to sharpen its focus on projects where it has greater control over long-term development and commercial activities.

“ICTSI deems the sale of YICTL in keeping with the ICTSI Group’s long-term strategy of focusing on concession contracts where ICTSI has control over critical aspects of the business, particularly with regards to long-term development and commercial activities, among others,” the company said.

“ICTSI is able to rationalize our strategy and redirect its resources to its other existing projects and those in its pipeline,” it added.

Ultimately, the transaction will give Yantai Port Holdings full ownership of YICTL. Aside from acquiring ICTSI’s 51-percent stake, Yantai Port Holdings will also take over the 12.5-percent interest held by DP World China (Yantai) Limited.

Before the deal, Yantai Port Holdings owned 36.5 percent of the terminal operator.

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Although ICTSI had been operating in Yantai since 2007, the company only acquired a controlling stake in the terminal in 2014, in a deal seen as a way to consolidate operations and improve scale by separating local and foreign container-handling operations.

At the time, ICTSI also sold its 60-percent stake in Yantai Rising Dragon International Container Terminals Ltd., which was converted into a dedicated domestic container services terminal.

Yantai is at the eastern tip of the Shandong peninsula, bordering the Yellow Sea and Bohai Bay. The port lies across from the heavily industrialized base of northern China, as well as South Korea and Japan.