Brazil Port Sells Terminal Stake Valuing Unit Above Parent

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Port of Acu
Port of Acu under construction along the Atlantic Ocean, Brazil. Source: Prumo via Bloomberg

Prumo Logistica SA, the developer of the Acu port in Rio de Janeiro, agreed to sell a 20 percent stake of its oil terminal for $200 million to Marquard & Bahls AG’s Oiltanking GmbH.

The deal values Prumo’s oil-terminal unit at $1 billion, or more than 1.5 times the parent company’s market valuation as of Wednesday’s close.

Hamburg-based Oiltanking, the world’s second-biggest independent crude storage provider, will manage the oil operations at the terminal as part of the deal, said R. Blair Thomas, 53, chief executive officer of EIG Global Energy Partners LLC, the private-equity firm that controls Prumo.

“We are now in the process where we are starting to demonstrate to the market what’s really here,” Thomas said by telephone from Washington. The deal shows “the market is off by an order of magnitude as to what this company is worth.”

The port of Acu, located about 320 kilometers (200 miles) northeast of Rio’s famous beaches, began shipments at an iron-ore terminal in October, leaving behind years of delays and cost overruns under it’s founder, ex-billionaire Eike Batista. In 2013, EIG took control of the project that sits on a plot of land bigger than Manhattan, investing 1.8 billion reais ($516 million) for a 74 percent stake in Prumo. Batista now holds less than 0.3 percent.

Stock Rally

Prumo’s stock has climbed more than 70 percent in Sao Paulo trading this year after signing contracts with companies including BG Group Plc and Votorantim Metais SA. Anglo American Plc started operating its terminal there in October. The shares, which traded Thursday at more than triple their three-month average, rose 11 percent to close at 84 centavos in Sao Paulo.

Acu is scheduled to start ship-to-ship operations in August 2016 after signing a key contract with BG to use the oil terminal to transfer as much as 200,000 barrels of crude a day. Prumo expects to sign one or two additional contracts with oil companies before the end of the year, Chief Executive Officer Eduardo Parente said in an interview last week.

The port is benefiting amid a shortage of Brazil oil infrastructure and as production grows from deepwater deposits, known as the pre-salt, Thomas said, adding that the oil terminal is expected to generate between 20 percent and 25 percent of Acu’s business.

“Production is coming,” he said. “Our aspirations for Acu are as large as its size.”

The agreement will allow Oiltaking to offer onshore services such as storage, blending, oil treatment and trading activities in the future, said Holger Donath, a managing director in Latin America for the German company.

“Our aim at Acu port is to offer the safest and most efficient transhipment operations,” he said in e-mailed comments.

Petroleo Brasileiro SA in June suspended open-sea ship-to-ship crude transfers off of the Angra dos Reis coast in Rio state after a spill. Petrobras, as the state-run Brazilian oil producer is known, and other producers including BG, often send Brazilian crude to be transfered to other vessels in the Caribbean or Uruguay’s La Paloma because of infrastructure shortages, boosting logistic costs.

The Acu oil terminal has planned capacity to handle 1.2 million barrels of crude a day, or almost half of Brazil’s current daily production.

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