Maersk, Port of Tauranga and Kotahi do a deal to bring big ships

Thursday 26th June 2014

Port of Tauranga has done a freight deal with the Fonterra Cooperative Group and Silver Fern Farms-led logistics company Kotahi and container shipping line Maersk that will facilitate the arrival of 6,500 TEU ships to New Zealand by the end of 2016.

Kotahi has agreed to commit 2.5 million export containers to Maersk over ten years, giving the shipping company confidence to plan for the introduction of 6,500 TEU vessels.

It will put 1.8 million TEU of export containers through Port of Tauranga over ten years, and will put significant volumes through the Timaru Container Terminal developed by Port of Tauranga over ten years.

Kotahi will take a 49.9 percent shareholding in the Timaru Container Terminal and Port of Tauranga will issue one million of its shares to Kotahi and one million more as volume grows. Kotahi’s rights to the shares and existing dividends are subject the freight volume commitments. The two million shares are equal to 1.5 percent of the port’s capital. The port’s shares last traded at $14.37.

“The cargo commitments give Port of Tauranga the certainty to proceed with the infrastructure to accommodate the 6,500 TEU ships,” chief executive Mark Cairns said.

The agreement is immediately earnings accretive for the port and gives it 30,000 TEU of extra containers from 2015.

Maersk has committed to introduce a new 4,500 TEU service from October 2014 to Tanjung Pelepas in Malaysia to provide extra capacity to New Zealand immediately. It complements the current Northern Star and Southern Star services.

“We now have a clear path to work on the introduction of Maersk Line’s 6,500 TEU vessels to New Zealand,” managing director Gerard Morrison said.

Port of Tauranga will dredge its harbour more to accommodate the 6,500 TEU ships by the end of 2016.

Its Timaru terminal gets an additional 52 vessel calls a year from this deal.

BusinessDesk.co.nz

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