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New Nassau Container Port set to be operational by December

Relocated, $70-million freight port will cover 56 acres on Arawak Cay and comprise of administration offices and warehouse facilities. In October, $8 million in shares in the Arawak Port Development Ltd will be offered to the public. 

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TheBahamasInvestor.com
Thursday, August 11, 2011
Thursday, August 11, 2011

Importers, businessmen and other relevant stakeholders were briefed at a luncheon meeting yesterday on the numerous benefits associated with the relocation of commercial shipping from the confines of busy, downtown Nassau to a $70-million, state-of-the-art port facility.

The relocation of the Nassau Container Port to the new 56-acre complex on nearby Arawak Cay frees over 20 acres of prime real estate for the redevelopment and revitalization of downtown. The relocation will provide members of the public with their first opportunity to invest in the shipping sector with a projected 10 per cent return on investments.


Arawak Cay Port Development Holdings (APDH), which is the founding private sector partner, and the Bahamas government have each invested $20 million into the project. Further financing has been raised through a Royal Bank of Canada (RBC) $30-million bridge loan. Another $30 million ($15 million in bonds and $15 million in preference shares) is expected to be derived from a private placement by Royal Fidelity early next year.

Government and the private sector–represented by a consortium of Bahamian shipping interests–subsumed under APDH. They are founding owners of the Nassau Container Port and its accompanying inland freight facility, the Gladstone Freight Terminal. Holding 50 per cent each, the partners agreed to release 20 per cent of their equity in a public share offering.

In October, $8 million in shares will be offered to the public.

“Very soon each and every Bahamian will be given the opportunity to invest in Arawak Port Development Ltd (APD),”?said Mike Maura Jr, chief executive officer for APD Ltd.

“The government wants a wide cross section of the Bahamian public to be able to particpate in the IPO,” added APD Ltd chief financial officer Dion Bethel. “We envision that the minimum subscription would be between $500 and $1,000, but that is to be determined.”

Next year, the $30 million RBC debt will be replaced by a combination of preference shares and bonds, which will be offered to institutional investors. The placement agents are Providence Advisors Ltd and CFAL.

The 50,000 sq ft container port is comprised of half warehouse space, half administrative offices. It will comply with the standards set by the International Ship and Port Facility Security (ISPS) Code.

The 15-acre Gladstone Freight Terminal site includes a facility for Bahamas Customs. Both sites will have the highest level, 24-hour security, with perimeter fencing and surveillance systems.

The project, which was launched in mid-2010, capitalized on a weak construction sector. Consequently, investors were able to negotiate an “attractive” price tag for the development of the port and inland freight terminal.

The lion’s share of the $70-million project (39 per cent, or $27.5 million)?has been allocated for marine and dredging works. The freight terminal is expected to cost $15 million (or just over 21 per cent of the budget).

Both the port’s terminals are expected to be operational by December, said Maura. All construction is expected to be completed by April next year.

tblair@dupuch.com

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