Spanish group ACS is close to selling the Spanish port business of its subsidiary Dragados SPL to a JPMorgan infrastructure fund, though concerns about the port sector are hampering the deal, sources familiar with the matter said.
Ports are seen as among the most vulnerable infrastructure assets in an economic downturn, with the recent crisis prompting many shipping lines to cut freight rates and capacity, even as the global economy starts to improve.
ACS is negotiating the sale of ports that account for about 90 to 95 percent of the earnings before interest, tax, depreciation and amortisation (EBITDA) of the Spanish business of Dragados SPL, three people familiar with the matter said.
Asked if there were plans to sell the Spanish port business of Dragados to JPMorgan, an ACS spokesman declined to comment. A JPMorgan spokeswoman also declined to comment.
Eyes on Valencia
Although Dragados’s Spanish port division includes several ports, including those of Bilbao, Malaga and Las Palmas, the sources said that a key asset in the portfolio was the port of Valencia, which had revenue of 114.3 million euros in 2008.
JPMorgan is seeking around 200 million euros from banks, mainly to recapitalise the port of Valencia, but progress in securing financing has been impeded by fears over the state of world trade and cargo overcapacity in Spain, the sources said.
The enterprise value of the assets is not clear. When ACS first launched the sale, more than a year ago, media reports suggested Dragados SPL could fetch up to 1.4 billion euros, but then JPMorgan started looking only at some of the assets. [ID:nGEE5B61DS]
ACS has been looking at selling port assets across the globe as it seeks to cut down on its net debt, which stood at 9.3 billion euros as of Sept. 30.
In December it sold a 24 percent stake in an Indian container terminal to Gammon Infrastructure. (Reuters)