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Saudi Arabia’s Public Investment Fund (PIF) and Cosco Shipping Ports Limited (CSPL) have each purchased a 20% equity stake in Red Sea Gateway Terminal (RSGT) for US$280 million. The transactions value the Jeddah container terminal operator at US$ 880 million.
The remaining 60% will continue to be held by the founding shareholders in the business, 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.
RSGT has signed a 30-year build, operate and transfer agreement with the Saudi Ports Authority (Mawani) which envisages the investment of US$ 1.7 billion in automation, infrastructure and equipment through to 2050, in order to reach an annual throughput capacity of approximately 9 million TEU. Under a further BOT agreement, in April 2020, RSGT significantly expanded its handling capacity by assuming the operations of the northern section of Jeddah Islamic Port. As a result, RSGT’s annual throughput capacity increased from 2.5 million TEU in 2019 to 5.2 million TEU today.
According to RSGT’s chief executive, Jens Floe, “Adding PIF and CSPL as shareholders will accelerate RSGT’s domestic and international growth plans. 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 program for infrastructure and port development.”
J.P. Morgan acted as the sole financial advisor while Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited acted as the legal advisor to the founding shareholders on the transactions. HSBC acted as the financial advisor to PIF and Freshfields Bruckhaus Deringer in association with Salah Al-Hejailan acted as the sole legal advisor to PIF on the transaction.
