MOL is planning to sell a 49-percent interest in its TraPac terminal
subsidiary to a Canadian company, Brookfield Asset Management.
According documents provided by TraPac to the Port of Los Angeles Harbor Commission, the transaction involves the purchase by a company controlled by Brookfield of 49 percent of the holding company of TraPac, which has container terminals in Los Angeles, Oakland, Calif., and Jacksonville, Fla., as well as operations and customer service facilities in Austin, Texas.
The LA Harbor Commission signed off on the transfer of a lease in their port to accommodate the deal at a Dec. 19 meeting.
According to documents prepared for that meeting
, a company controlled by Brookfield will purchase an indirect interest in 49 percent of TraPac’s business with the exception of its marine terminal in Jacksonville. However, Brookfield will have an option to purchase a 49-percent interest in the Jacksonville terminal in 2017.
Neither a Brookfield spokesman nor the MOL office in the U.S. had an immediate comment.
In November, the Los Angeles City Council approved major changes to the budget for modernization of the TraPac terminal, which soared in cost from $245 million in 2009 to $510 million, according to the Los Angeles Times
. The Times
reported that a decision to use automated rail mounted gantry cranes instead of rubber wheeled cranes accounted for $175 million in cost overruns.
Brookfield is a global alternative asset manager with more than $175 billion in assets under management. Its port investments include:
- Euroports, which owns and operates port facilities in 16 strategic locations in Europe and China and handles approximately 55 million tons of cargo per year
- PD Ports, a diversified deep sea port company operating in the U.K. that handles more than 30 million tons of cargo annually, including coal. It is the landlord and statutory port authority for the Port of Tees and Hartlepool on the North Sea, the fifth largest port in the U.K. by tonnage
- Dalrymple Coal Terminal in Queensland, Australia, which handles 85 million tons per year
In December, Brookfield said it had created
a $7 billion fund that will invest in infrastructure, with a focus on transportation, renewable power, utilities, and energy assets in North and South America, Europe and Australasia.
MOL said it was in discussions with Brookfield "to establish cooperation not only to add value to its own container terminals in the United States but also to consider further expanding cooperation coverage to their key strategic ports in various countries which complement MOL’s extensive liner network."
MOL added that it will announce further details, as soon as partnership agreement contents have been finalized.