The international ports operator DP World has been required to sell its stake in an Australian container terminal to its joint-venture partner, Flinders Ports, under the terms of their original contract.
The sale has been triggered by a transaction last year in which DP World, based in Dubai, agreed to sell 75 per cent of its entire Australian operations to the private-equity firm Citi Infrastructure Investors (CII) for A$1.5 billion (Dh5.66bn).
DP World's Australian subsidiary, DP World Australia, owns and operates container ports in Brisbane, Sydney, Melbourne and Fremantle. Included in that portfolio was a 60 per cent holding in Adelaide's container terminal.
The remaining 40 per cent was held by Flinders Ports, and under the deal, the Australian company retained a right to acquire the remaining stake in the event of a change in circumstances.
"Flinders has exercised that clause, despite various efforts over the last 18 months by DP World Australia to find common ground on meeting Flinders Ports' expectations of the joint venture," Ganesh Raj, the managing director of DP World Australia, said yesterday. "This was not a negotiated transaction."
DP World also confirmed the sale in a statement.
"Arising from the CII transaction, Flinders Ports exercised specific provisions in a shareholder agreement to buy out DP World Australia's 60 per cent shareholding in the joint venture for Adelaide Container Terminal, which has resulted in DP World Australia exiting the terminal.
"The total amount received by DP World Australia Limited was A$134 million, which represented a total enterprise value in excess of A$235m," the DP World statement said.
The Flinders chief executive, Vincent Tremaine, said that yesterday's transaction was the culmination of an 18-month process with the price determined by an independent valuation.
The purchase would now give Flinders greater control over the terminal and allow a longer-term approach towards planning, said Mr Tremaine.
Adelaide Container Terminal had more than A$66.8m of revenue last year, with revenue for the underlying business growing 11 per cent on the back of a stronger Australian dollar.
The company paid out a A$9m dividend from its A$12.9m after-tax profit, delivering A$5.4m to DP World and A$3.6m for Flinders Ports.
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