The Philippine Ports Authority (PPA) Board has approved the transfer of 15.7% of the shares of Harbour Centre Port Terminal, Inc. (HCPTI) in Manila North Harbour Port, Inc. (MNHPI) to International Container Terminal Services, Inc. (ICTSI).
ICTSI disclosed to the Philippine Stock Exchange that the PPA approved the transfer in a board meeting on April 26.
The port operator noted that the PPA Board approval was the last of the requirements to make effective the share purchase agreement signed in September 2018 for ICTSI’s acquisition of 4.550 million shares, representing 15.7% of HCPTI’s shares in MNHPI. Prior to this, ICTSI in September 2017 also signed a share purchase agreement to acquire 10.449 million of Petron’s shares in MNHPI, the acquisition representing 34.83% of the total issued and outstanding shares of MNHPI.
With this, ICTSI’s shareholdings in MNHPI now account for 50%. The remaining shares in MNHPI are being held by San Miguel Holdings Corp at 43.33%, IZ Investment Holdings, Inc. at 6.50%, and Petron Corp at 0.17%.
Prior to the PPA Board approval, the Philippine Competition Commission (PCC) in March cleared the acquisition, although it noted that “were it not for the presence of these existing regulatory barriers to entry, the Commission would have had a different conclusion on the proposed transaction.”
After evaluating the findings and recommendation of the PCC Merger and Acquisition Office, PCC found that the proposed transaction “will likely result in substantial lessening of competition in the identified relevant market for the provision of port operations services for foreign containerized cargoes in the Port of Manila, if not for the existing regulatory barriers to entry.”
With the MNHPI acquisition, ICTSI now has interests in both international and domestic port operations in Manila. ICTSI operates and develops ports around the world, with Manila International Container Terminal as its flagship operation. Its subsidiaries also operate ports in Subic, Misamis Oriental, Davao del Norte, and General Santos, among others.
MNHPI, on the other hand, has a 25-year concession under a PPA contract to modernize and operate domestic terminal North Port at Manila North Harbor.
ICTSI said the transaction will allow it to contribute its experience, expertise, and state-of-the-art technology and infrastructure toward enhancing the operational efficiency of North Port and improving the traffic condition in Metro Manila.
