China’s Cosco Pacific Ltd. will pay 125.4 million euros ($143 million) for shares and loans in a container-terminal operator in Rotterdam amid an overseas expansion drive by Chinese companies.
Cosco Pacific will buy 35 percent of Euromax Terminal Rotterdam BV for 41.4 million euros and assume 84 million euros of debt equivalent to 35 percent of a loan, the Chinese company said in a statement late Wednesday. Euromax is indirectly owned by Hutchison Port Holdings Ltd., which in turn is owned by Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings Ltd.
Development of the Euromax container terminal in Rotterdam, The Netherlands - Image: Port Consultants Rotterdam
The move will help Cosco Pacific, the container-terminal operator of China’s biggest shipping company, in expanding its operations overseas, the company said. China has undertaken a so-called “One Belt, One Road” initiative, a $40 billion strategy that aims to strengthen economic and transport ties across Eurasia, while raising the world’s second-biggest economy’s profile as a global power.
China Cosco Shipping Corp., the country’s biggest shipping company, makes calls to Rotterdam, Europe’s busiest container port. The Euromax terminal will see its handling capacity increased to 3.2 million 20-foot boxes when the second phase of expansion is completed, from the current 2.55 million, according to the statement. About 2.28 million boxes were processed in 2015.
Cosco Pacific’s terminals handled 19.3 million boxes last year, 1.1 percent more than in 2014. The company, which operates most of its container terminal business in China, signed an agreement in March with Singapore’s PSA International Pte. for an investment in the city-state.
The Hellenic Republic Asset Development Fund in February declared Cosco Pacific as the preferred investor of a 67 stake in Piraeus Port Authority.
One Belt, One Road is part of Chinese President Xi Jinping’s efforts to revive the ancient trade route and finance infrastructure construction there. As part of that strategy, the Asian country has been urging companies to expand abroad to improve competitiveness, helping result in $97 billion of announced deals in the first quarter.