Chinese gaint Cosco has taken a 20% stake in a privately-owned container terminal in the Saudi Arabian port of Jeddah.
Hong Kong-listed Cosco Shipping Ports Ltd (CSPL) is paying $140m for the stake in Red Sea Gateway Terminal Limited (RSGT), the terminal operator said.
Saudi sovereign wealth fund Public Investment Fund (PIF) has also agreed to take a 20% stake in RSGT alongside the Cosco investment.
The completion of both transactions is subject to the approval of the Saudi Arabian Ports Authority, as well as other customary approvals.
RSGT, which began operations in 2009, was founded by Saudi and international investors including Saudi Industrial Services Co, Xenel Industries and Malaysia’s MMC Corp, which has extensive port operations.
Retaining independence
RSGT said it will remain an independent terminal operator, focused on servicing its existing and future customers in the global logistics chain.
The company signed a new 30-year build, operate and transfer (BOT) agreement with the Saudi Arabian Ports Authority in December 2019.
This envisages the investment of $1.7bn in automation, infrastructure, and equipment through 2050, in order to reach an annual throughput capacity of about 9m teu.
Under the new BOT agreement, in April last year RSGT significantly expanded its handling capacity having assumed the operations of the northern section of Jeddah Islamic Port.
“Adding PIF and CSPL as shareholders will accelerate RSGT's domestic and international growth plans,” RSGT chief executive Jens O Floe said.
“The transactions highlight the strong commercial proposition and service excellence of RSGT.”
The development of RSGT into regional and global logistics hub is said to support PIF’s mission of unlocking new economic opportunities across the Saudi kingdom and deploying capital to support emerging sectors with significant long-term growth potential.
“RSGT will play a significant role in achieving these objectives, capitalising on the country's strategic location along the main Red Sea shipping routes,” Floe said.
CSPL already operates and manages 360 berths at 36 ports worldwide, of which 206 are for containers, with a combined annual handling capacity of 115m teu.
