Global independent infrastructure fund manager DIF Capital Partners announced on Monday that in partnership with French shipping giant CMA CGM, its DIF Core Infrastructure I (CIF I) fund has agreed to a 50% less one share stake in the strategically located TTIA Container Terminal in Algeciras in the Strait of Gibraltar, one of the top-five maritime hubs in Europe.
The seller is South Korea’s largest commercial shipper, HMM. Under terms of the sale agreement, HMM and CMA CGM will continue to provide long-term support to TTIA for terminal development. HMM will remaining a controlling shareholder through its ownership of HT Algeciras, a special purpose company that will retain 50% plus one share ownership in the port terminal.
HMM has owned 100% of TTIA since 2017, when it acquired the terminal from shipping megalith Hanjin Shipping after the latter’s bankruptcy.
The port operates through a concession from the Port of Algeciras Bay Authority that expires in 2043. The Port of Algeciras is considered strategic infrastructure for the Spanish supply chain, fully integrated into the international logistics network. TTIA is the first semi-automated terminal in Southern Europe and the Mediterranean, and is capable of handling 1.6 million TEUs of container cargo each year.
Liquidity lifeline
HMM had indicated in June that it was seeking a new investor for TTIA, a stake valued according to a June 18 securities filing with the Korea Exchange at KRW 59 million ($48.6 million). HMM—hit with sequential losses and reliant on government lifelines in the wake of covid-19’s impact on the maritime shipping industry—hoped to shore up its own liquidity position and, with the help of a strategic joint venture partner, to steer the Algeciras terminal toward stable income generation.
TTIA’s location in the Bay of Algeciras is situated directly on the main shipping routes for containerized sea traffic to Asia, Europe, the Mediterranean, North and West Africa, and North and South America. According to DIF, shipping volumes at this terminal have remained resilient during covid-19, owing to this strategic location.
In a statement , DIF partner Thomas Vieillescazes said: “We are delighted to initiate this partnership with CMA CGM, investing alongside world-leading shipping companies and port operators. TTIA is a modern and well-managed terminal, strategically located at the Strait of Gibraltar, with partners providing long-term volume support, making this an attractive investment for CIF I”.