Monday September 24, 2012
Westports raises fund
By SHARIDAN M. ALI
It’s issuing second sukuk of up to RM500mil to expand its terminal
KUALA LUMPUR: Westports Malaysia Sdn Bhd, one of two main maritime gateways in Port Klang, is expected to make a second issuance of between RM400mil and RM500mil from its RM2bil sukuk programme in the last quarter of this year for the expansion of its container terminal.
This sukuk issuance is expected to cater for the expansion of the second phase of container terminal six (CT6) and container terminal seven (CT7).
Westports launched a 20-year sukuk musharakah programme of up to RM2bil in nominal value in July last year.
Its maiden issuance of RM450mil sukuk under the musharakah programme was completed around the same time last year with overwhelming demand from investors.
Chief executive officer Ruben Emir Gnanalingam said the development of phase one of CT6 that entailed 300m of berth line was completed earlier this year and the second phase of the same berth length was under construction now. It would be operational by early next year.
“The completion of CT6 will add 1.2 million twenty-foot equivalent units (TEUs) to a total of 8.5 million TEUs capacity.
“After that, we are going to embark on the construction of CT7 with another 600m of berth line slated to for completion in March 2014,” he told StarBiz recently.
The total cost of CT6 and CT7 was estimated to be around RM500mil to RM600mil each.
On growth, Ruben anticipated that Westports, which handled 3.44 million TEUs for the first six months of this year, to hit a target volume of seven million TEUs for the entire 2012.
“This reflects a moderate growth rate of 9% from a total volume of 6.5 millions TEUs last year.
“The growth rates in the last two years (2011 and 2010) were robust compared with the slump in 2009 and end of 2008,” he said.
Westports recorded a volume increase of 18% in 2011 to 6.5 million TEUs with a milestone turnover breaching the RM1bil mark for first time.
Ruben said the growth rate was expected to return to the normal pace this year.
He explained that the cautious outlook and target were also influenced by the slower growth in Europe and the United States as well as the cooling down of China’s economy.
“But this will be compensated to a certain extent by the exciting growth in the Middle East, Africa, India and South-East Asia,” he said.
Ruben also expected that this moderate growth rate and cautious outlook would continue into next year.
On the idea of having a third container terminal operator in Port Klang, Ruben said it was not a necessity now.
“Based on Port Klang’s current annual growth rate, the earliest we will need extra capacity would be 2020. This is because Westports, after the construction of CT7, will continue to expand its capacity via CT8 and CT9,” he said.
On the shipping lines suffering from low rates and whether they were asking for discounts from the port, Ruben said that terminal handling charges only took up a small percentage of the total operational cost of shipping companies.
“Chunks of their operational cost come from fuel and financing cost of their vessels. They are more focused in these areas to reduce their total cost.
“Furthermore, many shipping players are already seasoned and are prepared to face the cyclical nature of their business,” he said.
On the anticipate listing of Westports, Ruben he said:“It has always been one of our options and bankers have approached us many times on this matter.