The two shareholders will each hold 20% stake upon finalization of the transactions
The sounding shareholders of Red Sea Gateway Terminal Limited (RSGT), a privately-owned independent terminal operating company, have signed separate Share Purchase Agreements (SPAs) with the Kingdom’s Public Investment Fund (PIF) and with COSCO Shipping Ports Limited (CSPL).
This was facilitated through its wholly-owned subsidiary Sound Joyce Enterprises Limited, for the sale of 40% equity interest in RSGT (with 20% each) for total consideration of SAR 1,050mn (US$ 280mn). The two transactions imply an enterprise value for RSGT of SAR 3,300mn (US$ 880mn).
The completion of both transactions is subject to the approval of the Saudi Arabian Ports Authority (Mawani), as well as other customary approvals.
Having commenced operation in 2009, RSGT was founded by leading Saudi and international investors (Founding Shareholders), including Saudi Industrial Services Company (SISCO), Xenel Industries, and City Island Holding Limited, a wholly-owned subsidiary of MMC Corporation Berhad (a Malaysian conglomerate with extensive port operations).
Upon completion of the transactions, PIF and CSPL will become shareholders of RSGT (with 20% shareholding each), while the founding shareholders will retain the remaining 60% shareholding in RSGT.
RSGT will remain an independent terminal operator, focused on servicing its existing and future customers in the global logistics chain. The company signed a new 30-year build, operate and transfer agreement with Saudi Ports Authority (Mawani) in December 2019 (BOT Agreement), which envisages the investment of US$ 1.7bn in automation, infrastructure, and equipment through 2050, in order to reach an annual throughput capacity of approximately 9mn TEU.
“As the largest terminal operator on the Red Sea and in Saudi Arabia, we are committed to serving the growing requirements of international cargo and container services throughout the global logistics chain and to fulfilling our customers’ needs and the goals of Saudi Arabia’s Vision 2030 programme for infrastructure and port development,” asserted Jens O. Floe, CEO, RSGT.
