Dear Editor, 

Further to articles which have appeared in the international and local media on the matter of the transfer of shares in Kingston Freeport Terminal Limited, The Port Authority wishes to provide clarification as follows:

Who are the parties to the concession agreement? The concession agreement for the development and operation of the Kingston Container Terminal, dated April 7, 2015, was between The Port Authority and Kingston Freeport Terminal Limited (KFTL).

KFTL is the special purpose vehicle (SPV) required in the bid document to carry out the operations of the terminal.

What is the ownership structure of KFTL? KFTL is described as the concessionaire, a company duly organised and validly existing under the laws of Jamaica, which was authorised in accordance with its constitutional documents to enter into this agreement, and as of the effective date was owned 60 per cent by CMA CGM and 40 per cent by CMA Terminal Holdings.

CMA Terminal Holdings is a fully owned subsidiary of CMA CGM. CMA CGM, therefore, currently holds all the equity in KFTL.

What effect will CMA CGM’s recently announced plans have on the ownership structure of KFTL? CMA CGM on November 25, 2019 announced that, as part of a programme to reinforce its financial structure and strengthen its liquidity profile, it proposes to transfer its interest in 10 terminals from the CMA CGM group to Terminal Link Limited, which is a joint venture partnership in which CMA CGM holds 51 per cent of the shares and China Merchants Port, 49 per cent. Terminal Link already holds participation in 13 port terminals across the globe. Among the terminals to be included in the proposed transaction is KFTL.

Does The Port Authority have to approve the sale/transfer of shares to Terminal Link? The concession agreement provides that a change in control requires prior written approval of The Port Authority of Jamaica. Our information is that there will be no change in control of the ownership of KFTL. If and when the proposed transaction is concluded KFTL will continue to be controlled by CMA CGM, given its holding of 51 per cent of the shares in Terminal Link.

Has The Port Authority been notified of the proposed sale/transfer of shares? KFTL/CMA CGM have informed the The Port Authority of Jamaica of the proposed change in shareholding.

Are there any revenue implications for The Port Authority of Jamaica arising from the sale/transfer of shares? There are no direct revenue implications for The Port Authority. It is however anticipated that cargo volumes to the port should increase, leading to higher revenues for the terminal. Under the concession agreement, The Port Authority receives a share of the revenues generated by KFTL.

Kimberley StiffAssistant vice-president – marketing communicationskstiff@portjam.com