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Cosco Pacific in jv to buy into Turkey's Kumport Terminal

Cosco Pacific in jv to buy into Turkey's Kumport Terminal
Cosco Pacific is expanding its footprint in Europe, buying in, together with a consortium of two other Chinese companies, a stake in the Kumport Terminal in Turkey.

Thee other stakeholders in the joint venture are China Merchants Holdings (International) (CMHI) and CIC Capital. Cosco Pacific will have a 40% stake along with CMHI with CIC Capital taking up the remaining 20% in Euro-Asia Oceangate, the joint venture company for the acquisition.

The consortium is expected to pay $940.2m for a 64.5% stake in Fina Liman, the holding company for the port and a 1.3% direct stake in the port, representing the interests not owned by Fina Liman. The remaining 35.5% stake in FIna Liman is owned by Turkac, a unit of Oman's Ministry of Finance.

Cosco Pacific said in a stock market announcement that Kumport is a modern container terminal in the Ambarli Port Complex, on the northwest coast of the Marmara Sea on the European side of Istanbul. It is the third largest container terminal in Turkey, handling about 13% of the country's container traffic, is capable of handling 18,000 teu vessels and with a current capacity of 1.84m teu with six berths. The terminal has room for expansion to up to 3.5m teu capacity.

In the past five years, Kumport Terminal has maintained a compounded annual growth rate of about 30% in container volume with its container throughput reaching 1.4m teu in 2014.

Giving its rationale for the deal, Cosco Pacific said: "The transaction will enable the Company, CMHI and CIC Capital to become investors in Kumport Terminal, which is the third largest container terminal in Turkey and is located at a gateway to the Black Sea and a strategic interchange between Europe and Asia. The board believes that Kumport Terminal has good development prospects given the potential business synergy between Kumport Terminal and the company’s existing investment in Piraeus Container Terminal S.A. in Greece and the cooperation between the Company and CMHI in light of their respective experience in investing, managing and operating overseas port operations as well as port operations in the PRC and their respective relationships with liners."

Cosco Pacific added that the strategic location of Kumport Terminal in Turkey, will also tie in well with China's “Silk Road Economic Belt and the 21st Maritime Silk Road” policy initiative.