Vopak sells on strategy switch

OUT WITH THE OLD

DIVESTMENTS • AS PROMISED, VOPAK HAS SOLD FOUR OF ITS PETROLEUM TERMINALS IN EUROPE AS PART OF ITS STRATEGY TO BE ABLE TO MEET LONG-TERM MARKET DEVELOPMENTS

ROYAL VOPAK HAS agreed the sale of three European bulk liquids storage terminals to First State Investments, as well as its joint-venture terminal in Tallinn, Estonia. The deal is in line with Vopak’s announcement in August 2018 that it was looking to divest these assets. At the time, CEO Eelco Hoekstra said: “We find this the natural moment for a strategic review and test the market value of our terminals in Algeciras, Amsterdam, Hamburg and Tallinn. This review is fully in line with the focus on growing our portfolio

VOPAK’S DUPEG TERMINAL IN HAMBURG (BELOW) WAS ONE

OF FOUR IDENTIFIED LAST YEAR AS BEING SURPLUS TO THE

OPERATOR’S REQUIREMENTS IN THE CURRENT MARKET with the four strategic terminal types (major hubs, gas and LNG, industrial terminals, distribution in major markets).”

Announcing the sale of the Algeciras, Amsterdam and Hamburg assets at the start of April, Hoekstra said: “Today’s announcement is a next step in the delivery of our strategy and the alignment of our portfolio based on long-term market developments. In Europe, our main focus is to further strengthen our position in the major industrial clusters Rotterdam and Antwerp. Globally, we currently have more than 2m m³ under construction and new projects will be announced to grow our portfolio with a focus on industrial, chemical, and gas terminals and to maintain our strategic position in hub locations.” DEAL DETAILS The deal with First State Investments involves facilities that are primarily involved in the storage of petroleum products; they are the Dupeg terminal in Hamburg (668,600 m³), the Westpoort facility in Amsterdam (1.22m m³) and the 80 per cent-owned Algeciras terminal in Spain (403,000 m³), which acts primarily as a bunkering terminal. This represents a combined capacity of some 2.29m m³.

Vopak and First State have agreed a price of €723m, including a €15m element based on revenue conditions. This translates to a net pre-tax cash inflow for Vopak of around €670m and an exceptional gain in the region of €200m, which is expected to be booked in the second half of the year once the deal closes.

“We are delighted to have reached an agreement with Vopak on the acquisition of the terminals in Algeciras, Amsterdam and Hamburg,” says Marcus Ayre, partner at First State Investments. “This diversified portfolio of world-class oil product storage terminals provides an excellent fit with First State’s long-term infrastructure investment philosophy. We look forward to working with the incumbent highly skilled management team and employees to continue to develop and grow the business.”

First State Investments was founded in Australia in 1988 and became part of the Commonwealth Bank of Australia in 2000. It is currently in the midst of being sold to Mitsubishi UFJ Trust and Banking, a deal that is expected to close in the middle of this year.

The other transaction involved the sale of the Vopak EOS business in Estonia, owned as a 50/50 joint venture by Vopak and Global Ports Investments, to Liwathon, as Abu Dhabi-based commodity trading, logistics and investment firm. The assets include a bulk liquids terminal with a capacity of 1.03m m³ in the port of Tallinn and the railway company ERS. Vopak expects a “modest” gain on the deal, which will be included in its second quarter results. HCB www.vopak.com