In addition to the SPA to purchase 30.79% stake in Valetta Cruise Port (VCP) on September 1, 2015, GPH now signs another SPA for an indirect 33.14%, aiming to control up to 63.95% of VCP…
As a reminder, Global Ports Holding (GPH), a 100% subsidiary of Global Investments Holding, had signed a binding sale and purchase agreement (SPA) on September 1, 2015, to purchase 30.79% of shares in Valletta Cruise Port Plc (VCP), a Maltese company, which is engaged in cruise port operations and rent-out of office and retail areas in Malta. GPH, this time, has also signed a binding SPA with the shareholders of M. Demajo Port Ventures Ltd.’in (“MDPV”) to purchase 100% of MDPV, which has an indirect 33.14% stake in VCP. The successful completion of the transaction is subject to legal and regulatory approvals; and the consideration for the shares will be announced following the successful completion of the conditions precedent and the closing of the transaction. As the shares to be taken over from MDPV is an indirect purchase of VCP, those shares will not be subject to preemptive rights. Through the aforementioned two transactions, GPH anticipates to control up to 63.95% of VCP directly and indirectly, depending on the waiver of the preemptive rights of the previously signed SPA.
The Company took over the cruise and ferry terminal operations in Valletta, Malta in 2002 in connection with a 65-year concession agreement which was awarded as a result of an international tender issued by the Government of Malta. The concession also includes a 65-year lease of 48,000 square metres of land and buildings adjacent to the quays. VCP, through its 90% subsidiary Travel Shopping Ltd. also runs duty-free operations in the port. Targeting a total passenger number of around 650,000 in 2015, the Company envisages to increase its home-porting activities parallel to the expected increase in the total number of passengers.
Addition of Valletta Cruise Port to our portfolio will further enhance our leading position in the Mediterranean Cruise Port Market with total passengers (Pax) reaching an estimated 4.2mn by 2015 year-end and capturing a distinctive c.16% cruise market share in the Mediterranean. Meanwhile, Valletta Cruise Port has the ability to generate over US$10mn of revenues and around US$5mn of EBITDA annually, which should contribute to our financial performance in the coming periods.
Located in Mid-Mediterranean, Malta has an important upside potential in the cruise sector, with its unique position for West-Med itineraries departing from Barcelona and Civitavecchia, as well as for East-Med itineraries departing from Istanbul and Piraeus. Hence, the total number of passengers is expected to reach 750,000 in 2016. The Company, which serves industry players such as Carnival, Royal Caribbean Cruises, MSC, Celebrity, TUI Cruises, and Costa, targets to increase its home-porting activities up from around 20% currently. In addition, the cruise market in Malta is expected to grow faster than the overall market in the medium term, with the potential addition of North-African destinations back to itineraries.
In addition to the expected increase in the cruise activities, the Company is also currently assessing a second phase investment in the development of office and retail areas, totaling 12,000 sqm within the concession territory.
Commenting on the SPA, Saygın Narin, the CEO of GPH said: “I am happy to announce the signing of the second SPA in connection with VCP, intending to increase our stake in the Company to majority. I believe that the Company will reach its potential performance under GPH; and we will be capitalizing on the upside potential of Malta due to its unique location in Mid-Mediterranean. Arpak Demircan, Deputy CEO of GPH said “The acquisition of shares from VCP is a step ahead in fortifying GPH’s leading position as the largest cruise port operator in the world.”