The transactions imply an enterprise value for RSGT of US$ 880mn
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 US$ 880mn and a total gross inflow of equity value for the founding shareholders US$ 280mn. The founding shareholders will reduce their combined shareholding to 60%, a press communiqué issued by RSGT revealed.
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.
Enhancing value proposition
RSGT will benefit and enhance its value proposition with the support of and a leading global ports operator like CSPL, which they 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, the press statement continued.
“This is a significant milestone for RSGT’s, demonstrating both our strength a business and the confidence which the industry and investment community have in our strategic planning and implementation. Working closely with PIF and CSPL, we will 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,” affirmed Jens O. Floe, CEO, RSGT.
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 centre.
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 2.5mn TEU to 5.2mn TEU, becoming the largest container terminal in KSA.
Growing throughput capacity
Throughout the concession period, RSGT’s annual throughput capacity is envisaged to grow to about 9mn TEU following an investment plan of US$ 1.7bn 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, the press note added.
“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”, concluded Jens O. Floe.
