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Ports and Terminals

Auction of Suape shipyard areas postponed to July

Jun, 22, 2022 Posted by Gabriel Malheiros

Week 202225

The court-mandated auction of portions of the Atlântico Sul Shipyard (EAS) in Suape, scheduled for June 21st, has been pushed back to July. The EAS accepted a local consortium’s request to reopen the tender deadlines. The Justice of Cabo de Santo Agostinho agreed to the postponement since prolonging the term would provide more security to the auction and more protection to the parties, both sellers and final buyers.

On May 27th, Jamildo’s blog revealed first-hand that the Danish Maersk, one of the largest shipping companies in the world, planned to buy an internal pier at the Atlântico Sul shipyard in the port of Suape. Private company EAS has been in a court-supervised reorganization process since 2020 and needs to sell assets to pay creditors.

The auction of the areas belonging to the shipyard in Suape is being conducted by the state of Pernambuco and was originally open to bids until the 21st.

Through a subsidiary in Holland, APM Terminals, operator of container terminals, the multinational offered R$ 895 million for the South Pier in the inner area of the port of Suape. Atlântico Sul shipyard had already agreed to the commercial proposal, according to information from the Court.

“If it takes the terminal, Maersk will change the face of Suape, which is currently suffering from a competitiveness problem. The purchase could attract investments of billions and a second container terminal (today there is only Tecon Suape, of Philippine origin)”, stated a source on the blog.

See below a graph displaying monthly volumes of container exports and imports at the Port of Suape in the period from January 2021 to April 2022. The data below was extracted from Datamar’s platform DataLiner.

Imports and Exports of Containers at Suape | Jan 2021 – April 2022 | TEU

Source: DataLiner (click here to request a demo)

New Billion-Dollar Proposals

Two groups have filed appeals, requesting rule changes as well as a delay in the bidding date. Tecon Suape, which already controls a terminal in Suape and may face foreign competition or, if it purchases the territory, quit the public terminal to operate a private terminal, was one of them.

A local company, Cone Suape, submitted the second application. Its deferral proposal was accepted because the same company agreed to waive a previous appeal. With the withdrawal of the action, the EAS committed to open a new deadline.

“There is actually no priority for Maersk. This stalking horse model is valid. A few rules must be tweaked to ensure competitiveness. And this must be done in alignment with the creditors”, explains a source on the blog.

The final result of the sale notice will be published after the decision of the 1st Civil Court of the District of Ipojuca. According to Jamildo’s blog, the Cabo Justice system received offers worth more than R$1 billion from international groups that did not qualify for the process because they disagreed with the criteria that gave Maersk the right to cover bids from competitors.

The 1st sale notice was published on 11/10/2021, but on 12/02/2021, the deadline for qualifying interested parties for the acquisition of UPI-B passed without any proposal.

The 2nd public notice was scheduled for this Tuesday, June 21st, but is postponed now.

Price and Payment Method

The minimum amount for the acquisition of the entire Pre-Constituted Isolated Production Unit B (UPI B) is R$ 895,000,000.00 (eight hundred and ninety-five million); for acquiring UPI-B Cais Sul is BRL 300,000,000.00 (three hundred million reais); and for UPI-B Central is five hundred and ninety-five million (R$595,000,000.00), “Minimum Price,” to be paid in full in cash, in national currency, in available resources, free and clear of any onus, upon deposit in a bank account to be indicated by the Company under Reorganization, concomitantly with the closing of the acquisition of Pre-Incorporated UPI B, UPI-B Cais Sul or UPI-B Central under the terms of the Purchase and Sale Agreement.

Source: Jornal do Comércio

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