CMPort to buy 90% stake in Brazil's TCP for $923m


China Merchants Port Holdings Company (CMPort), via its wholly owned Kong Rise Development, has signed a share purchase agreement with TCP Participações (TCP) to purchase 90% stake in Brazil's Port of Paranagua´ for a sum of roughly HK$7.2bn ($923m).

CMPort aims to expand its business to the Latin America region with the transaction, as well as further strengthen its overseas global port network.

The deal is also expected to enable the company to use TCP's marine transportation hub to expand its logistics network, export / import services and industrial zone, in addition to facilitating the development of potential residential projects and related financial service platforms.

Funding for the deal will be obtained through a combination of CMPort’s internal resources and external debt financing.

CMPort vice-chairman China Merchants Group (CMG) executive vice-president of Dr Hu Jianhua said: “Brazil is the largest economy in Latin America with huge market potential and abundant resources and reserves.

"Brazil is also a member of the BRICS group of nations and is China's most important comprehensive strategic partner and trade counterpart in Latin America.

“The transaction serves CMG's intention to promote commercial cooperation with the BRICS countries and the ‘China Brazil Joint Action Plan’.

“The transaction will help us achieve our commercial objectives, and at the same time enhance the trade development between Brazil and China and the comprehensive strategic cooperation relationship of the two countries.”

"The transaction will help us achieve our commercial objectives, and at the same time enhance the trade development between Brazil and China."

TCP and its subsidiaries are principally involved in the operation of container terminal concessions in the Port of Paranagua´, which features the second largest container terminal in Brazil.

TCP is designed to handle 1.5 million twenty-foot equivalent units (TEUs) of cargo per year.

The facility's annual cargo handling capacity will be further increased to 2.4 million TEUs once the planned expansion works are completed.

The expansion project is set to begin later this year and is slated to complete by the second half of 2019.


Image: Agreement signing between CMPort and TCP Participações executives. Photo: courtesy of China Merchants Port Holdings Co Ltd.