On 6 February 2018, China Merchants Port Holdings Company Limited (CMPort HKSE code: 0144) entered into the Acquisition Agreement with China Merchants Union (BVI) Limited (CMU, a substantial shareholder of CMPort and an associate of CMG) and Gold Newcastle Property Holding Pty Limited (Gold Newcastle, a wholly-owned subsidiary of CMU), of which CMU and Gold Newcastle agrees to sell their interest of 50% in Port of Newcastle (including shareholder loans of AUD162.5 million) to CMPort or its wholly-owned subsidiaries with a total consideration of AUD607.5 million (equivalent to approximately HK$3,809 million). The remaining 50% interest in Port of Newcastle is held by TIF Investment Trust, an independent third party.
The acquisition of Port of Newcastle in Australia is the first step for CMPort to invest in Oceania which can complement current trading network covered under the Company’s port portfolio with further potential synergies. Given the unique position of the Port of Newcastle with precincts containing land resources, the acquisition will bring opportunities for the Company to further achieve its "Port and Park" development under “Port-Park-City” (“PPC”) model, which aims to operate its core port businesses together with the park development and infrastructure support, thereby achieving a port-centered ecosystem with port operations as its core. CMPort believes that the acquisition, which represents a fair and reasonable price, will generate positive long-term financial return to the Company.
Information on the Port of Newcastle:
The Port of Newcastle is the largest port on the east coast of Australia and the world’s leading coal export port. The principal business of the companies comprising the Port of Newcastle includes passive property investment, port management including responsibility for vessel scheduling, property management and port development, trade development, dredging and survey, wharf and berth services, maintenance of major port assets, and pricing for associated services.
Based on the unaudited financial report of Port of Newcastle as at 31 December 2016, the total assets and net assets value attributable to the security holders of Port of Newcastle amounted to approximately AUD2,441.1 million (equivalent to approximately HK$15,305.4 million) and AUD854.8 million (equivalent to approximately HK$5,359.6 million), respectively. The net profits after taxation based on the unaudited financial report of Port of Newcastle in 2015 and 2016 are AUD6.03 million and AUD29.65 million respectively.
The Port of Newcastle consists of 4 port zones, including 21 Berths (9 exclusive coal berths) with a total design capacity of 211million tonnes. In 2016, it handled bulk cargo volume of 167million tonnes, of which 161million tonnes are generated from coal export. The Port of Newcastle is the only gateway port for Hunter Valley coalfields which produces high-quality thermal coal, it handles approximately 40% of Australia’s export volume of coal. Port of Newcastle is poised to capture the rising demand for thermal coal from its current major importers, i.e. Japan, South Korea and Taiwan.
The Port of Newcastle is a 'Landlord Port' with 98 years of management right & land lease right since 2014, it consists of a total land area of 792 hectares, including approximately 200 hectares of vacant port land available for further development. In Sept 2016, the New South Wales Government announced a commitment of AUD 12.7 million for a permanent multi-purpose cruise terminal facility at Port of Newcastle, which will begin construction in 2018.