May 25, 2010 [ICLG] – In the midst of an oil demand decline, a global Netherlands-based terminals and storage company has bought a 50% interest in Odfjell Terminals Dalian, an oil and chemicals tank terminal operator in Dalian, northern China, from parent company Odfjell.
Clyde & Co acted through its Chinese counterpart, Clyde & Co Westlink JLV, to advise the purchaser, VTTI Terminals I, a subsidiary of parent company VTTI Group, on purchasing the terminal for a cash price of USD 59 million. Frankfurt Stock Exchange-listed Odfjell specialises in seaborne transportation and the storage of oil and chemicals. Odfjell is the ultimate parent company of Odfjell Terminals, which operates five tank terminals across China, Korea and the United States, including Odfjell Terminals Dalian.
Following VTTI Terminal I’s acquisition of the Dalian terminal, Bergen Norway-headquartered Odfjell projects that it will realise approximately USD 27 million in cash, as well as equity amounting to USD 13 million, which will feature in its second quarter 2020 financial results. Since the announcement, Odfjell’s share price has recovered slightly, following a sharp fall throughout February and March, largely owing to Covid-19.
“The sale of Odfjell Terminals Dalian represents another step in the restructuring of our terminal portfolio and is in line with our strategy to focus on chemical terminals where we can harvest synergies with Odfjell Tankers or have another angle for further value creation by Odfjell,” said Odfjell’s CEO, Kristian Mørch, in a statement.
He continued: “Odfjell Terminals Dalian has become a reference within the Chinese terminal industry as a specialty chemicals terminal.” A member of the Clyde & Co advisory team, consultant Michael Cripps, added in a separate statement that “this acquisition marks VTTI’s entry into the China market, and reflects the confidence felt by many businesses in the swift recovery and continued opening-up of the Chinese economy. We believe the latter part of 2020 will see significant cross-border mergers and acquisitions activity in China”.
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