Saudi Arabia’s sovereign wealth fund has signed an agreement to buy a 20 percent stake in the Red Sea Gateway Terminal Limited (RSGT), a privately-owned independent terminal operating company.
Shareholders of the company have signed separate agreements with the Public Investment Fund (PIF) and with Cosco Shipping Ports Limited (CSPL) through its wholly-owned subsidiary Sound Joyce Enterprises Limited, for the sale of 40 percent equity interest in RSGT for SR1.050 billion ($280 million).
The two transactions imply an enterprise value for RSGT of SR3.3 billion, a statement said.
The completion of both transactions is subject to the approval of the Saudi Arabian Ports Authority (Mawani), as well as other customary approvals, it added.
Having commenced operation in 2009, RSGT was founded by investors including Saudi Industrial Services Company (SISCO), Xenel Industries, and City Island Holding Limited, a wholly-owned subsidiary of MMC Corporation Berhad.
Upon completion of both transactions, PIF and CSPL will become shareholders of RSGT while the founding shareholders will retain the remaining 60 percent.
RSGT will remain an independent terminal operator, focused on servicing its existing and future customers in the global logistics chain.
The company signed a new 30-year build, operate and transfer agreement with Mawani in December 2019, which envisages the investment of $1.7 billion in automation, infrastructure, and equipment through to 2050 in order to reach an annual throughput capacity of approximately 9 million TEU.
In April 2020, RSGT significantly expanded its handling capacity having assumed the operations of the northern section of Jeddah Islamic Port.
“Adding PIF and CSPL as shareholders will accelerate RSGT’s domestic and international growth plans. As the largest terminal operator on the Red Sea and in Saudi Arabia, we are committed to serving the growing requirements of international cargo and container services throughout the global logistics chain and to fulfilling our customers’ needs and the goals of Saudi Arabia’s Vision 2030 program for infrastructure and port development,” said RSGT’s CEO Jens O Floe.
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