Israel Corporation (TASE: ILCO) wholly-owned subsidiary Zim Integrated Shipping Services Ltd. has sold its 47.5% holding in the Tin Can Island Container Terminal at the Lagos Port to a joint venture of China Merchants China Direct Investments Ltd. (HKSE: 00133) and the China-Africa Development Fund for $154 million in cash. Zim will report a gross profit of $120 million on the sale.
Tin-Can Island Container Terminal is Nigeria's second largest container terminal. Zim will also sign a ten-year port of call agreement with the terminal, and sell additional rights in connection with the asset. Zim's partner in the container terminal is Bollore Logistics Africa, a unit of Paris-based Group Bollore SA (Euronext: BOL).
Zim said that the sale was part of its long-term business plan. The sale was brought forward from its originally planned closing in 2011.
The Tin Can Island Container Terminal has three berths, with a capacity of 360,000 TEU containers per year. A fourth berth is being upgraded, which will increase the terminal's capacity to 400,000 TEU per year.
Zim has extensive commercial activities in Nigeria, and operates a number of shipping lines, connecting Asia, Europe and the United States, to Nigeria, as well as a fully owned shipping and logistics agency in Lagos.
Zim president and CEO Rafi Danieli said, "Zim operates on a wide scale in the trade between Asia, Europe and the United States, to Nigeria. In recent years ZIM made significant investments to develop the terminal, bringing it to commercial success. The structure of the current deal, ensures the continued partnership between Zim and TICT for many years to come, and Zim’s customers will continue to enjoy the highest levels of service in Nigeria."
Danieli added that the proceeds from the sale would enable the company to develop and expand its shipping transportation activities in the international lines in Asia, North America and Europe.
Israel Corp.'s share price 2.5% by early afternoon to NIS 4,070, giving a market cap of NIS 30.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2010
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