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Saudi sovereign fund PIF completes $140m deal for stake in port terminal

Saudi Arabia’s sovereign wealth fund has completed a deal to buy a stake in Red Sea Gateway Terminal Limited (RSGT).

Upon completing all necessary conditions and obtaining all regulatory approvals, the founding shareholders of RSGT have officially completed their 40 percent equity sale to the Public Investment Fund (PIF) and Cosco Shipping Ports Limited (CSPL), with each acquiring a 20 percent stake.

The transactions imply an enterprise value for RSGT of $880 million and a total gross inflow of equity value for the founding shareholders of $280 million.

PIF is the economic engine of Vision 2030, driving the diversification of Saudi Arabia’s economy. The investment in RSGT is in line with its 2021-2025 strategy that focuses on 13 key priority sectors, including transport and logistics.

The location of RSGT is on the main East-West trade routes, with close proximity to the main cargo end destinations on the west Coast of Saudi Arabia and captures significant intra-Red Sea trans-shipment cargo volumes.

The investment will help to transform RSGT into both a regional and global logistics hub in line with PIF’s mission of unlocking new economic opportunities locally and globally, a statement said.

Jens O Floe, CEO of RSGT, said: “This is a significant milestone for RSGT’s, demonstrating both our strength a business and the confidence which the industry and investment community have in our strategic planning and implementation.

“Working closely with PIF and CSPL, we will accelerate our shared vision, further strengthen our customer offering, and elevate our mandate to meet the increasing demand for terminal and logistics services. RSGT will continue to focus on developing a niche emerging market operator with a keen focus on ports in the Red Sea and East Africa.”

Having commenced operation in 2009, RSGT is located at Jeddah Islamic Port, a logistics hub serving as a global trade nexus linking Asia, Europe, and Africa, as well as an increasingly important regional business centre.

RSGT will remain an independent terminal operator, servicing its customers across the global logistics chain. It will also continue to focus on the development, construction, operation, and maintenance of port terminals and on logistics services.

“Moving forward, a key element of RSGT’s ongoing development plan, beyond domestic and targeted international expansion, is to further develop our modern port and supply chain facilities enabling us to better meet the needs of our global and local customers”, added Floe.
Source: Arabian Business

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