ICTSI gets P325 million from sale of stake in Davao port

MANILA, Philippines — Razon-led International Container Terminal Services Inc. (ICTSI) will get P325 million from the sale of its majority share in a private port in Davao del Norte.

ICTSI announced yesterday that its subsidiary Abbotsford Holdings Inc. (AHI) sold its 65 percent stake in the Hijo International Port Services Inc. (HIPSI), a commercial port in Tagum, Davao del Norte, after HIPSI missed out on the demand it was supposed to serve.

“The expected market for HIPSI did not materialize,” ICTSI said.

According to ICTSI, AHI obtained a bank guarantee to pay for the remaining balance under the share purchase agreement (SPA) it entered into with Hijo Resources Corp. In the SPA, AHI sold to Hijo Resources a total of 162,500 shares or 65 percent, in HIPSI.

ICTSI said AHI would receive P325 million from the sale of its shares in the Davao port. In turn, AHI will no longer serve as a shareholder in HIPSI.

In its regulatory filing, the port manager said AHI sold its stake in HIPSI for P2,000 apiece, a price that was negotiated and determined based on a discounted cash flow method.

The firm owned by billionaire Enrique Razon Jr. said it took P95 million as an initial payment for the sale of its shares in the Davao port.

The remainder of the amount at P230 million will be settled in multiple tranches in the next eight quarters supported by the bank guarantee.

In 2012, AHI acquired subscription rights to 40 million common shares in HIPSI to bring its stake in the port to a controlling 65 percent. HIPSI – a joint venture with Hijo Resources – operates the Hijo International Port, which sits on reclaimed land of about 10.3 hectares.

The Hijo International Port is made up of two cargo sheds in the wharf area and several terminal support facilities. The Davao port facilitates hundreds of thousands of banana shipments every year given that Hijo Resources started out in 1959 as an exporter of Cavendish.

In July, ICTSI’s unit Davao Integrated Port and Stevedoring Services Corp. exited its operations in Sasa Wharf at the Port of Davao after managing it for 10 years until 2016.

The Philippine Ports Authority awarded the management contract for the Sasa Wharf to the joint venture of Globalport Terminals Inc. and Globalport Ozamis Terminal Inc. for P8.64 billion.