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China Merchants sells 22.55% stake in Paranaguá terminal to investment funds

China Merchants sells 22.55% stake in Paranaguá terminal to investment funds

China Merchants Port Holdings (CM Port) has sold a 22.55% stake in southern Brazil’s Terminal De Containeres de Paranaguá (TCP) to the China-Portugal Cooperation Development (CPD) Fund and the China-LAC Cooperation (CLAC) Fund.

This equity transfer is the first time that CMPort has brought in strategic investors for its overseas existing terminal assets.

A statement from the operator noted: “This strategic cooperation further optimised TCP’s current equity structure and cements CMPort future development of port infrastructure in Latin America region and worldwide together with strategic investors.”

CMPort had acquired a 90% share of TCP in September 2017 and began negotiating for a share transfer to the CPD and CLAC Funds in the second half of 2018.

The CPD Fund manages assets worth US$1bn and focused on investments in China and Portuguese-speaking countries aiming to promote global development for its enterprises.

Meanwhile, the CLAC Fund was jointly founded by the Export-Import Bank of China (60%) and the Chinese State Administration of Foreign Exchange (40%), beginning operations in 2014.

It is a private equity fund with investment focus on the Caribbean and Latin America region.

TCP inaugurated the terminal expansion works in October 2019, following investments worth over R$600m (US$140m).

The project included the extension of the quay from 879 m to 1,099 m in length and from 40.75 m to 50 m in width. It also began the operation of two cranes manufactured by ZPMC.

The terminal is now able to simultaneously operate three of the largest container ships in Latin America and its capacity is up by 60% from an annual 1.5m teu to 2.5m teu.