Long Beach terminal has no shortage of suitors
THE US west coast Long Beach Container Terminal (LBCT) is reported be sought after by various parties
THE US west coast Long Beach Container Terminal (LBCT) is reported be sought after by various parties.
According to Bloomberg the facility has drawn interest from Blackstone Group LP, KKR & Co, EQT Partners and an arm of Macquarie Group since the US government is exerting pressure on Cosco to sell the highly automated gateway and complete its acquisition of a 75 per cent stake in Orient Overseas Container Line (OOCL).
The suitors are now calling as Cosco and OOCL's parent company, Orient Overseas (International) Ltd (OOIL), entered into an agreement with the US Department of Homeland Security and Department of Justice this summer to sell LBCT to a 'suitable, unrelated third party' acceptable to the US government.
Bloomberg said its information about the potential partners of LBCT came from 'people familiar with the matter', reported American Shipper. Bloomberg said the facility could be valued at US$1 billion or more, depending on the structure of the deal.
The port of Long Beach's middle harbour redevelopment programme where LBCT is situated will cost the port a total of $1.5 billion and is being developed over three phases. Construction began in 2011 and phase one commenced operations in late 2015. Phase one and two, encompassing two thirds of the terminal area, have been completed at a cost of $1.023 billion.
Spokesman Lee Peterson said the port authority was 'in the midst of the third and final phase' of development which is estimated to cost a $469.5 million and encompasses a 100-acre site. The entire project is scheduled for completion by the end of 2020.
'Our $1.5 billion is for the wharf, container yard, rail yard, truck gates, dredging and also rail for the stacks. It also includes the buildings,' said Mr Peterson. 'LBCT has said it is spending at least $600 million on the cranes, vehicles and other equipment.'
He said the new buyers of Long Beach Container Terminal will determine how much to pay for the facility based, in large measure, on how much cargo Cosco and OOCL commit to moving through the facility and whether the terminal is also able to attract business from other major global shipping lines.
LBCT leases the port of Long Beach's 311-acre middle harbour terminal. It is redeveloping the facility into what the port calls 'the world's greenest container shipping terminal' using electric and zero-emissions equipment.
Until the sale of LBCT is completed Cosco said back in July that it would be transferred into a trust overseen by a sole US citizen and a 'security officer' responsible for compliance with a 'National Security Agreement and matters relating to the security of the LB terminal business.'