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PSA lands Halterm & Penn Terminals

PSA International is buying both Halterm and Penn Terminals from Macquarie Infrastructure partners.

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PSA International has confirmed reports it is buying the Halterm Terminal in Halifax, Canada and Penn Terminals in Pennsylvania, USA from Macquarie Infrastructure Funds owned by Macquarie Real Asset Management. Regulatory approvals have not yet been obtained.

 

Both Halterm and Penn terminals are 100% owned by Macquarie Infrastructure Partner funds. Macquarie bought Halterm in 2006 for C$172.8M, and added Penn Terminals in 2008. In 2014 the lease on Halterm was extended by 20-years to 2034.

 

Macquarie has been selling down its port assets recently, including DCT Gdansk in Poland, a deal that also involved the PSA.

 

It was widely expected in Canada that CN Rail rail would be part of the winning bid for Halterm, for the most part because CN is the only railroad that serves Halifax, and having CN onboard would be a significant asset in growing the port’s container traffic. CN CEO Jean-Jacques Ruest had confirmed that the railroad was bidding for Halterm with an unnamed partner from the shipping industry. Canadian media have reported that CN and others were outbid late in the process by PSA.

Brand new Liebherr STS cranes at Penn Terminals
Brand new Liebherr STS cranes at Penn Terminals

The sale comes at an interesting time. Macquarie has been adding equipment at both facilities, including two new Liebherr cranes at Penn Terminals, to boost their saleability, but both terminals face key challenges. Penn Terminals will come up against increased competition from Gulftainer, which is expanding Wilmington in neighbouring Delaware to a 1.2M TEU terminal. In Canada, the Port of Halifax is currently reviewing options for expanding existing terminals, or developing a new facility, to manage future growth. The port authority has come out and said moving to a new site is unlikely, but it still needs to find a way to address road congestion and rail capacity, and there are no easy (or cheap) answers.

 

Despite these issues Halterm attracted multiple bids. The port handled around 550,000 TEU in 2018, down slightly on 2017, when throughput jumped 16%. There are two competing greenfield projects in Nova Scotia, Melford International Terminal and Novaporte, none of which has been able to secure a terminal operator ready to invest their own capital to build a box terminal to compete with Halifax.

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