Macquarie's newest Korea fund makes second investment

Macquarie acquires a 40% stake in South KoreaÆs Hanjin Terminals at a price which values the terminals business at around $870 million.
Macquarie's newest Korea fund has acquired a 40% stake in South KoreaÆs Hanjin Terminals. The details of the price paid have been withheld but Hanjin has announced that the price values the entire business at $870 million.

Hanjin Terminals comprises the marine terminal operations of Hanjin Shipping in six locations: Kaohsiung, Taiwan; Osaka and Tokyo, Japan; and Long Beach, Oakland and Seattle in America. In Japan, the scope of the transaction is limited to the administration of terminal facilities only.

Hanjin Shipping will continue to own the remaining 60% of Hanjin Terminals; it will also retain management control over Hanjin Terminals. Hanjin Shipping says the transaction won't affect on-site management or operations of the respective facilities and also that senior management at the terminals would remain unchanged. The transaction is expected to make Hanjin ShippingÆs overseas terminal businesses more competitive as a stand-alone operating company and allow it to explore new opportunities to create value.

Hanjin ShippingÆs president, Jung-Won Park, termed the transaction ôan opportunity to increase our market share of marine facilities operations while complementing our global expertise in the shipping and port facility management sectorsö. Park also said that he expected the deal to ôbetter reflect the true value of our terminal businessö.

Macquarie Korea Opportunities Fund's managing director, David Russel, notes: ôHanjin Terminals is strategically positioned along one of the worldÆs fastest growing trade routes and is well placed to capitalise on increasing demand for capacity constrained container terminals.ö He also drew attention to the partnership with one of KoreaÆs leading business groups, and said the business was part of MacquarieÆs key target asset class of container terminals.

Hanjin Shipping, part of the Hanjin Group, is a global logistics company and Korea's largest ocean carrier. It operates 145 vessels, covering 80 major ports in 35 countries, and 11 dedicated terminal facilities globally. Hanjin ranks number eight among worldwide container shipping companies and is South KoreaÆs only shipping company in the top 10. The countryÆs government is keen to grow its shipping-related businesses and wants to capitalise on the unique North Asian geographical advantage South Korea enjoys to become a logistics hub for the region.

The investment will be made by the Macquarie Korea Opportunities Fund (MKOF), a long-term infrastructure investment fund managed by Macquarie Korea Opportunities Management. MKOF has committed funds of approximately $825 million.

The investment in Hanjin Terminals is the second investment by MKOF. In March this year, MKOF acquired a 49% interest in South Korean gas distribution company, SK E&S for an undisclosed consideration. SK E&S holds 25% of the gas distribution market in South Korea and serves around 2.5 million customers through its ownership of 7,700 kilometres of distribution assets.
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