China Merchants Port Holdings sells assets in Brazil to two state funds in China

20 January 2020

China Merchants Port Holdings Co., Ltd. has sold part of the shares of Paranaguá Container Terminal (TCP), one of the largest in Brazil, to two Chinese state funds, including one focused on the markets of Portuguese-speaking countries, the group said in a statement issued on Friday.

The China-Portugal Cooperation Development Fund (managed by the China-Africa Development Fund) and China-LAC Cooperation Fund acquired 22.55% of the share capital of the TCP, during a ceremony for the transfer of shares which concluded a process begun in the second half of 2018.

China Merchants Port Holdings Co., Ltd. in February 2018 in Brasilia signed a contract for the acquisition of 90% of the shares of TCP, the group that manages the container terminal of Paranaguá, in Paraná State.

The Paranaguá container terminal, one of the largest in Brazil, has an annual processing capacity of 1.5 million TEU (twenty-foot equivalent units) and has started an expansion project to be able to process 2.4 million TEU per year.

The announcement did not mention the amount paid by the two funds to acquire that stake in the TCP, but the initial deal involved the payment by the Chinese group of 2.891 billion reais (US$922 million, based on the exchange rate at the time).

The China-Portuguese-speaking Countries Fund for Cooperation and Development, founded in 2013 with assets valued at US$1 billion, has a mission to invest in the markets of those countries.

The China-Latin America Fund, created in 2014 during a visit by Chinese President Xi Jinping to Brazil, has as its main shareholder the China Export-Import Bank, with 60%, while the remaining 40% is held by China’s State Administration of Foreign Exchange. (macauhub)