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Port unveils $200m expansion

Sok Chan / Khmer Times Share:
Sihanoukville Autonomous Port is trying to get listed on the stock exchange. Supplied

Sihanoukville Autonomous Port (SAP) is to build a $200 million container terminal as part of an expansion project due to be completed by 2022.
 
The expansion is intended to address a surge in the volume of containers passing through the country’s only deep-sea port. The existing container terminal is expected to be overloaded by 2023.
 
Lou Kim Chhun, SAP director-general, told Khmer Times yesterday that the volume of containers passing through the port will increase to more than 700,000 TEUs in 2023.
 
The 20-foot container, referred to as a twenty-foot equivalent unit or TEU, is the industry standard reference for cargo volume and vessel capacity.
 
“In response to increased demand, SAP will invest about $200m to build a new 350-metre container terminal equipped with modern shipment facilities,” Mr Kim Chhun said. The terminal will be 14.5 metres deep.
 
“We are studying the project with the Japan International Cooperation Agency (JICA) and want it to be ready by 2022. We currently have more than 400,000 TEUs passing through the port. With the expansion, we will be able to handle about 1,000,000 million TEU.”
 
He added that Cambodia will seek a loan from JICA to build the new container terminal.
 
Public Works and Transport Minister Sun Chanthol visited the port on Monday. He said strong economic growth had resulted in the increase of containers coming into the port.
 
“SAP’s new container terminal will service this growth,” he said.
 
Mr Chanthol said that between 2002 and 2005, the state-owned enterprise spent $33.7 million on building a 240-metre container port. From 2005 to 2009, SAP also spent $34.8m on expanding that port to 400 metres.
 
In 2015, SAP launched a $74.2m project to build a multipurpose seaport measuring 330 metres wide and 13.5 metres deep. It is about 65 percent finished and should be complete by next year.
 
“So far, SAP has received about $178.6m in loans from JICA,” Mr Chanthol said.
 
The multipurpose port will serve imports and exports of coal, steel, fertilizers, rice and oil.
 
Mr Kim Chhun said it will improve the cost efficiency of cargo shipments and increase SAP’s capacity to handle larger ships from all over the world.
 
“In the future, we will have a passenger terminal port for tourists. Cruise ships have used our existing port. We get less than 30 cruise ships per year at the moment, but when that increases, we will do it,” he said.  
 
The SAP is also trying to get listed on the Cambodian Securities Exchange (CSX) and last week launched a book building process to determine what price to offer in an initial public offering (IPO).
 
Once listed on the CSX, SAP will be the fifth company on the bourse joining Phnom Penh Special Economic Zone Plc., Phnom Penh Autonomous Port, Grand Twins International (Cambodia) Plc. and the Phnom Penh Water Supply Authority.
 
Book building is the process by which an underwriter attempts to determine the IPO price based on demand from institutional investors. An underwriter builds a book by accepting orders from fund managers, indicating the number of shares they desire and the price they are willing to pay.
 
So Eiichiro, chairman of SBI Royal Securities – the sole underwriter for SAP – said that the book building was “to test the waters and gain a greater insight into the investment appetite for the IPO.”
 
SAP plans to issue 21.4 million shares, about 25 percent of the company’s authorised capital of $105 million, to raise its paid up share capital from $18.85 million to $27.74 million.
 
According to a brief issued to the CSX, the Cambodian government through the Ministry of Economy and Finance will control 75 percent of SAP after the IPO. Public investors, it added, will control 22.5 percent while SAP’s employee stock ownership programme will own 2.5 percent.

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