The Dubai-based port operator entered the Brazilian market in August 2013, purchasing one third of Embraport in Santos, and is reportedly close to acquiring the remaining shares of the terminal. Meanwhile, local media reported that DP World is also a frontrunner to purchase 50 per cent of Terminal de Conteineres de Paranagua (TCP).DP World is acquiring the remainder of Embraport's shares from the Odebrecht Group, which has been struggling financially since former CEO Marcelo Odebrecht was found guilty of paying out US$30 million in bribes to win dozens of construction and shipbuilding contracts. He is now serving a 19-year prison sentence.
According to the Valor Economico newspaper, DP World and China Merchants Ports are frontrunners for TCP, while IHS Media reports that Hong Kong's Hutchison Port Holdings, and Singapore's PSA International are also interested in TCP, which is valued between $954.5 million and $1.3 billion.
A source close to DP World said DP World was interested in buying half of TCP, but "the price had to be right" given the current economic climate. Container throughput at TCP declined 7.3 per cent year on year in 2016 to 725,000 TEU.
TCP has an annual capacity of 1.5 million TEU and plans to expand to 2.5 million TEU by 2020. TCP has committed to extending its concession contract with the government for another 25 years, but part of that agreement involves following through on the expansion, and any new shareholder will have to invest in that effort.
DP World would buy the TCP shares from global private equity firm, Advent International, which is seeking $1.2 billion, a considerable mark-up on the $500 million they paid for it in 2012.
The actual value of TCP is uncertain because of Brazil's recession and overcapacity in the container terminal sector. Container volumes in Brazil decreased by 4.4 per cent year on year in 2016 to 8.8 million TEU, according to regulatory authority Antaq.
The asking price for the TCP shares might be too high because of intense competition for cargo among the states of Parana, Santa Catarina, and Sao Paulo at a time of industry consolidation with fewer shipping lines calling at fewer ports. TCP currently has a monopoly in the state of Parana, although that could change if the Pontal de Parana project for a two million TEU box facility gets approved.
While Advent International holds 50 per cent of TCP, the rest of the company is held by six companies: APM Terminals, Grup Maritim TCB, Pattac Empreendimentos e Participacoes SA, TUC Participacoes Portuarias SA, Soifer Participacoes Societarias Ltda., and Galigrain SA.
According to the Valor Economico newspaper, DP World and China Merchants Ports are frontrunners for TCP, while IHS Media reports that Hong Kong's Hutchison Port Holdings, and Singapore's PSA International are also interested in TCP, which is valued between $954.5 million and $1.3 billion.
A source close to DP World said DP World was interested in buying half of TCP, but "the price had to be right" given the current economic climate. Container throughput at TCP declined 7.3 per cent year on year in 2016 to 725,000 TEU.
TCP has an annual capacity of 1.5 million TEU and plans to expand to 2.5 million TEU by 2020. TCP has committed to extending its concession contract with the government for another 25 years, but part of that agreement involves following through on the expansion, and any new shareholder will have to invest in that effort.
DP World would buy the TCP shares from global private equity firm, Advent International, which is seeking $1.2 billion, a considerable mark-up on the $500 million they paid for it in 2012.
The actual value of TCP is uncertain because of Brazil's recession and overcapacity in the container terminal sector. Container volumes in Brazil decreased by 4.4 per cent year on year in 2016 to 8.8 million TEU, according to regulatory authority Antaq.
The asking price for the TCP shares might be too high because of intense competition for cargo among the states of Parana, Santa Catarina, and Sao Paulo at a time of industry consolidation with fewer shipping lines calling at fewer ports. TCP currently has a monopoly in the state of Parana, although that could change if the Pontal de Parana project for a two million TEU box facility gets approved.
While Advent International holds 50 per cent of TCP, the rest of the company is held by six companies: APM Terminals, Grup Maritim TCB, Pattac Empreendimentos e Participacoes SA, TUC Participacoes Portuarias SA, Soifer Participacoes Societarias Ltda., and Galigrain SA.