10 Sep 2012 07:00
For immediate release 10 September 2012
Global Ports Investments announces strategic investmentby APM Terminals to drive next phaseof the group's development
·; APM Terminals brings unrivalled global terminal operating expertise to new partnership
·; Positions Global Ports as the first choice partner for leading container shipping companies seeking to do business in Russia
·; Transaction is the largest foreign direct investment in the Russian transportation industry to date
Global Ports Investments PLC ("Global Ports", and together with its subsidiaries and joint ventures, "the Group"), (LSE ticker: GLPR) announces that APM Terminals B.V. ("APM Terminals") a global port, terminal and inland services operator has signed agreements to become a major shareholder of Global Ports and a strategic partner of Transportation Investments Holdings Limited ("TIHL" or "N-Trans"), one of Russia's largest privately owned transportation groups. APM Terminals is a part of A.P. Moller-Maersk A/S, leading oil and transportation conglomerate.
Under the terms of the transaction APM Terminals will acquire a 37.5% shareholding in Global Ports from TIHL, representing 50% of TIHL's current stake. The transaction values Global Ports' entire share capital at approximately USD 2.3 billion[1].
By becoming an equal partner with N-Trans in Global Ports, APM Terminals secures entry into Russia's fast-growing container market alongside one of Russia's largest privately-owned transportation groups and through a company with a highly regarded management team with a proven track record of performance. The investment also follows Russia's accession to the World Trade Organisation (WTO) and represents the largest foreign direct investment in Russia's transportation industry to date.
The transaction will strengthen Global Ports' leading position by providing it with access to APM Terminals' unrivalled global expertise in the development and operation of world-class ports facilities as the Group continues to roll out its strategic investment programme. This new partnership will enable Global Ports to further optimise its operations, develop new capacity and services, and continue to drive the containerisation of Russian cargoes. It will also further boost Global Port's positioning as the first choice for the world's major shipping groups as they look to capitalise on increased trade flows into and out of Russia.
APM Terminals and TIHL have undertaken to reduce the voting rights of their respective shareholdings. This step will effectively increase the voting power of shareholders in the free float who together hold 25% of GPI's equity [2] but will then have about 40% of the total voting rights in GPI.
The Group's already strong corporate governance structures will be enhanced by the entry of APM Terminals as an equal partner with N-Trans under a comprehensive shareholder agreement providing for the joint control of the Group and for its operational management going forward. Global Ports' existing management team will continue to run the business and will be able to call upon further expertise and resources from APM Terminals in the shape of expert managers and other specialists.
Global Ports will continue to be focused on the high growth markets of Russia, CIS and the Baltic States and will become the growth platform for APM Terminals and N-Trans in the region. By bringing together the existing management's regional knowledge and experience and APM Terminals' extensive global expertise, Global Ports will be even better placed to provide existing customers with the services they require and to further expand the Group's customer base.
The increased competitive strengths Global Ports will gain as a result of the transaction will enable it to establish a target gearing ratio of Net Debt/Adjusted EBITDA of 1.5 - 2.0 to be reached progressively by balancing further expansion with dividend distribution.
Completion of the transaction is expected to occur by the end of the year once all the relevant approvals have been obtained. Further transaction details are included in the Appendix to this announcement.
Nikita Mishin, Chairman of Global Ports, commented:
"We very much welcome APM Terminals as a partner in developing Global Ports. I am confident that by drawing on the expertise of a leading international player like APM Terminals and N-Trans's significant experience in developing infrastructure in Russia, we will further strengthen Global Ports' leadership in our markets. With the support of these shareholders we can look forward to the successful development and efficient deployment of new capacity and will be able to respond even more quickly to the opportunities for growth in our underlying markets to the benefit of all of our stakeholders."
Kim Fejfer, CEO of APM Terminals, commented
"The Russian economy continues to grow and APM Terminals wants to be part of that. Global Ports is a clear leader in its sector with a very experienced and customer-focused management team and a good eye for growth opportunities. They have an excellent network of facilities with significant scope for capacity development. These qualities, combined with our global experience in port development, productivity, safety and performance, will clearly create the best port choice in the market for clients. Russia and the neighbouring countries have immense growth potential and looking to the future, our teams will work together to identify new market opportunities in this region."
Information materials
The transaction-related slide presentation is available for viewing on the company's website www.globalports.com.
Analyst and investor conference call
An analyst and investor conference call hosted by Nikita Mishin, Chairman of Global Ports, Alexander Nazarchuk, Chief Executive Officer, and Oleg Novikov, Chief Financial Officer will be held on 10 September, 2012 at 09.00 New York time (EDT) / 14.00 London time / 17.00 Moscow time. To participate in the conference call please dial one of the following numbers and ask to be put through to the "Global Ports" call:
UK toll free: 0808 109 0700
International: +44 (0) 20 3003 2666
There will also be a webcast of the call available through the Global Ports website (www.globalports.com). Please note that this will be a listen-only facility.
ENQUIRIES
GLOBAL PORTS:
Investor Relations
Mikhail Grigoriev
+357 25 503 163
Email: irteam@globalports.com
Priit Pedaja (N-Trans)
+7495 961 0272
priit.pedaja@ntransgroup.ru
Media Relations
Anna Vostrukhova
+357 25 503 163
Email: media@globalports.com
Holloway & Associates
Laura Gilbert
+44 20 7240 2486
Email: globalports@rholloway.com
APM TERMINALS:
Erik Eisenberg, Vice President, Communications & Branding
The Hague, Netherlands
Office: +31 (70) 304 3180
Mobile: +31 (61) 089 1229
Erik.Eisenberg@apmterminals.com
Tom Boyd, Director, External Communications
The Hague, Netherlands
Office: +31 (70) 304 2181
Mobile +31 (61) 272 5696
Thomas.H.Boyd@apmterminals.com
NOTES TO EDITORS
Global Ports Investments PLC is the leading operator of container terminals in the Russian market. Global Ports accounts for 30%[3] of the total container volumes in Russian ports and 23%[4] of the total exports of fuel oil from the former Soviet Union countries. Global Ports is part of N-Trans group, one of the largest private transportation and infrastructure operators in Russia. Global Ports' terminals are located in the Baltic and Far East Basins, key regions for foreign trade cargo flows. Global Ports operates three container terminals in Russia (Petrolesport and Moby Dik in St. Petersburg, Vostochnaya Stevedoring Company in the Vostochny Port) and two container terminals in Finland (Multi-Link Terminal Helsinki and Multi-Link Terminal Kotka). Global Ports also includes Yanino Logistics Park located in the vicinity of St. Petersburg and a major oil terminal, Vopak E.O.S., in Estonia.
Global Ports' consolidated revenue for the year ended 31 December 2011 was USD 501.3 million (up 31% year on year). Adjusted EBITDA for the year ended 31 December 2011 was USD 282.2 million (up 37% on the year ended 31 December 2010).
The Group's Russian Ports segment handled a total container throughput of approximately 1,344 thousand TEUs in 2011 (excluding Yanino), a 44% increase on 2010.
In June 2011 Global Ports listed its Global Depository Receipts (GDRs) at the Main Market of the London Stock Exchange (GLPR).
For more information please see: www.globalports.com
Transportation Investments Holding Limited (TIHL) is one of the largest privately-owned transportation groups in Russia, the CIS and the Baltic Region with strategic interests in rail transportation and port operations and carries on business under the name of N-Trans. TIHL is ultimately controlled by a company the beneficial owners of which are Nikita Mishin, Konstantin Nikolaev and Andrey Filatov.
Information on APM Terminals
APM Terminals' Global Terminal Network of ports and inland services provide the infrastructure for the growth of international trade, 90% of which travels by sea. International commerce is an economic growth engine, creating jobs, lifting economies and improving people's lives around the world.
With world headquarters in The Hague, Netherlands, the company's core expertise is the design, construction, management and operation of ports, terminals and inland services with a Global Terminal Network of 56 operating port facilities and 155 Inland Services operations, giving APM Terminals a global presence in 64 countries.
For more information please see: www.apmterminals.com; www.apmterminalsphotos.com (photos) www.apmtvideonews.com (multimedia)
Footnotes
[1] Enterprise value, to be adjusted for net debt.
[2] Includes 5.52% of GPI's equity held in the form of GDRs by a third party that has notified GPI of such holding.
[3] Source: ASOP, as of 2011
[4] Source: Argus Nefte Transport, as of 2011
APPENDIX
Proposed shareholding structure:
TIHL: 88,125,000 ordinary shares, 88,125,000 ordinary non-voting shares
APM Terminals: 88,125,000 ordinary shares, 88,125,000 ordinary non-voting shares
GDR free float: 117,500,001 ordinary shares represented by 39,166,167 GDRs each representing three ordinary shares (40% voting interest).
Shareholders' Agreement:
Parties: TIHL and APM Terminals
Duration: As long as the parties (or their connected persons) hold shares or GDRs - subject to termination by a party if the other holds less than 25% plus 1 share of the aggregate issued and outstanding Global Ports voting share capital
Geography and scope of operations: Handling and storage of containerised and general cargoes and liquid/non-liquid bulk at seaports and inland terminals in Russia, CIS, and the Baltic States
Board Composition: A total of 14 directors, two of whom are independent, six of whom may be nominated, appointed, removed and replaced by TIHL and six of whom may be nominated, appointed, removed and replaced by APM Terminals. Chairman and vice-Chairman rotates between TIHL and APM Terminals every two years, Chairman nomination by TIHL for first term and vice-Chairman nomination by APM Terminals for first term. Quorum: simple majority of directors, with one being a TIHL director, one an APM Terminals director and one independent. Certain key matters at Global Ports and subsidiary level require the affirmative vote of at least one TIHL and one APM Terminals director
Board Committees: equal number of directors from both TIHL and APM Terminals and at least one independent. Chairman to be independent. Quorum: three directors, with one being a TIHL director, one an APM Terminals director and one independent.
Shareholder Reserved Matters: certain key matters require the approval of both TIHL and APM Terminals.
Senior Management: Appointed jointly. Rotation of senior management nomination right. During first three years TIHL will nominate the CEOs of the Company and the Operating Companies, and APM Terminals will nominate the CFO of the Company and the Operating Companies and the COO of PLP.
Management matters:
Funding and Minimum Gearing Ratio: TIHL and APM Terminals to procure that the Group maintains a target net debt to EBITDA ratio of 1.5 to 2 times, and satisfies its external funding needs with borrowings to the extent available on commercially reasonable terms
Dividend Policy: Dividends to be determined in accordance with the Group's current Dividend Policy and, in addition to maintain a Target Gearing Ratio after taking into account budgeted cash flows (including capex) and performance against budget as well as any debt financing to fund such dividend, subject in any case to amounts legally available for distribution. TIHL and APM Terminals acknowledge that by setting up the target gearing ratio further dividend distribution over and above the Group's Dividend Policy might be possible.
Sales of interests: transfers of securities are not permitted in the first lockup period (2 years). Further lockup period of 3 years, in which a party can transfer shares provided the transfer does not result in either TIHL's or APM Terminals' holdings of ordinary shares to fall below 25% plus 1 share of the total voting shares. Rights of first refusal, tag along rights, and standard pre-emption rights apply
Conversion of shares:
Conversion: TIHL to convert approximately 50% of ordinary shares held by it into ordinary non-voting shares. TIHL to transfer 50% of its share holding in each class to APM Terminals.
Conversion process: Board to convene Global Ports EGM to pass specials resolutions approving the reclassification of shares and the adoption of new articles before completion
LEGAL DISCLAIMER
Certain statements and/or other information included in these materials are not historical facts and are "forward looking" within the meaning of Section 27A of the U.S. Securities Act of 1933 and 2(1)(e) of the U.S. Securities Exchange Act of 1934, as amended. The words "believe", "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project", "will", "may", "might", "should", "could" and similar expressions (or their negative) identify certain of these forward-looking statements. Forward looking statements include statements concerning the Company's and its shareholders' plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues, operations or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, its competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, business strategy and the trends the Company anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information and the assumptions underlying these forward looking statements. By their very nature, forward looking statements involve inherent risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements in these materials are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Many of such assumptions are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. These assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control and it may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of profitability, growth, cost and any recent acquisitions, the timely development of new projects, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.