CMA CGM will buy HMM’s 50% stake in Total Terminal International Algeciras (TTIA), which operates a container terminal in the south of Spain.
HMM announced on 18 June 2020 that it was selling the stake for KRW59 billion (US$48.57 million), as the South Korean liner operator seeks to strengthen its liquidity after a string of losses.
TTIA is owned by HMM and HT Algeciras which is a special purpose company wholly controlled by HMM. The South Korean company directly owns a stake of 50% minus one share, with the remaining 50% stake plus one share held by HT Algeciras.
HMM decided to sell its own 50% stake minus one share but still maintains its position as the largest shareholder through HT Algeciras.
CMA CGM is expected to bring additional cargoes to the TTI terminal, and HMM expects its co-operation with the French liner operator to enhance its own profitability.
“TTIA has a great geographical advantage to play an integral role as a transhipment hub,” an HMM official said, adding “lWe believe TTIA will take centre stage in the Gibraltar area as it has a high potential for future growth and development.”
The sale requires approval from the European Union, the Spanish and South Korean governments, and the directors of HMM and CMA CGM, as well as the Port of Algeciras Bay Authority.
TTIA was awarded the concession in July 2008, and the facility is located on the Phase A plot of the Isla Verde in the Strait of Gibraltar. The terminal can process up 1.8 million TEU annually.
Originally owned by Hanjin Shipping, which went bankrupt in February 2017, TTIA was sold to HMM seven months later, with a view to cutting the line’s terminal handling costs as it sought to restore profits.