Release Date: 01 December 2006
Release ID: 1146
Orient Overseas (International) Limited (OOIL) – HKEx: 316 – today announced the sale of its Terminals Division to Ontario Teachers’ Pension Plan Board (“OTPP”) for US$2,350 million in cash for 100% of the share capital of the Terminals Division. Additionally, OTPP will assume approximately US$60 million of net debt. The consideration was determined after conducting an open bidding process. UBS acted as the sole financial adviser to OOIL on the transaction. The transaction is subject to OOIL shareholders and regulatory approvals, and is expected to be completed by the end of the first quarter of 2007.
The transaction represents a very substantial disposal for OOIL. Pursuant to the Hong Kong Stock Exchange Listing Rules, OOIL will dispatch a circular to its shareholders as well as hold a special general meeting as soon as possible to approve the transaction. At the request of OTPP, Tung Holdings (Trustee) Inc., which holds the voting rights in respect of the shares held by certain substantial shareholders, which, together, own approximately 52.19% of the entire issued share capital of OOIL, has given an irrevocable undertaking to OTPP to vote in favour of the resolution to approve the transaction.
OOIL will undertake a review of the potential uses of proceeds from the transaction, including expansion of the core businesses of the Group and mechanisms for returning capital to the shareholders such as special dividends and share repurchases. As OOIL expects that completion will take place by the end of the first quarter of 2007, it anticipates providing further details by the time it releases its full year results in March 2007.
"We are very pleased with this outcome,” said Nicholas Sims, CFO of OOIL. “This transaction provides substantial benefits to both OOIL and the Terminals Division. OOIL has realized significant value for its shareholders, and in OTPP, the Terminals Division has secured a long-term owner who is focused on infrastructure assets with the ability to further enhance growth.”
Commenting on its purchase, Jim Leech, senior vice president, Teachers’ Private Capital, the private investing arm of OTPP, said, “This acquisition represents solid, robust assets, has little vulnerability to market or economic vagaries, and offers the long term cash flow we look for as a pension plan. We are thrilled to welcome these assets into our portfolio and are keenly focused on continuing to invest in and expand the terminals.”
OOIL’s Terminals Division comprises four container terminals located in North America:
* TSI Terminal Systems Inc. (TSI), which operates two container terminals – Deltaport and Vanterm – in the Port of Vancouver;
* New York Container Terminal (NYCT) on Staten Island, New York in the Port of New York; and
* Global Terminal (Global) in Bayonne, New Jersey in the Port of New Jersey.
For the unaudited 12 month period ending June 2006, OOIL's Terminals Division recorded a record total throughput of 2,568 TEU (000s) with a sales turnover of US$444.3 million and earnings before interest, taxation, depreciation and amortization of US$99.8 million. The Terminals Division also recorded earnings before interest, taxation, depreciation and amortization of US$76.4 million and net profits after taxation of US$36.1 million for the year ended 31 December 2005. Major expansion schemes are planned for both Deltaport in the Port of Vancouver and New York Container Terminal in the Port of New York. The Terminals Division operates as a stand alone profit centre and a disposal would not impact the efficient operations of Orient Overseas Container Line (OOCL), OOIL's core container liner business.
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