Canadian deal offers stability to port sector (From The Northern Echo)

Canadian deal offers stability to port sector

12:27pm Saturday 21st November 2009

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TEESPORT owner PD Ports was yesterday bought by a Canadian asset management company, in a deal that was hailed as bringing more certainty to the group.

PD has recently suffered through the financial troubles of its former owner Babcock and Brown Infrastructure (BBI). As part of the acquisition, Canadian-based Brookfield has agreed to wipe out £100m of debt that the port operator had.

The acquisition marks asset management company Brookfield’s first move into the ports sector, in a deal that was hailed as positive for PD’s operations in the North-East, including Teesport – which is to start work on the £300m deep-water Northern Gateway Container Terminal in 2011 – and another port in Hartlepool.

David Robinson, chief executive of Middlesbrough-based PD Ports, said while the future looks more optimistic, the fortunes of its key clients Corus Teesside Cast Products (TCP) – which only has its future secured until the end of next month – and of Teesside’s chemical sector, will be important in PD’s performance.

The potential demise of TCP was a major factor in PD announcing 120 job losses earlier in the year, a figure which has now been cut to 50.

“This deal helps to bring more certainty to the group, and removes some of the uncertainty we have seen in the past 12 to 18 months, which has been a very tough time, due to both the economic climate and some corporate issues,”

said Mr Robinson.

“I think this will prove to be very, very good in going forward, both in the short-term and the long-term. But, of course, we still have other factors to consider in looking at what happens.

“We still have no final answers over what happens at Corus and with the chemical sector, both of which will have important consequences for us, but for now, as it stands, we are in a much more certain position and can look at growing the business and improving our operations at PD.

“Over the last three to six months our performance has been very, very good compared to what is happening elsewhere in the sector, and we now feel more optimistic in going forward.”

Debt-laden BBI has been looking to balance its books for some time, and revealed earlier in the year it would be willing to part with PD for the right price. It is understood the acquisition was for a nominal sum in a deal with saw Brookfield assume debt.

Fazia Hussain, regional officer for the Unite union, said: “I hope this means there will be a period of stability for the employees, without having to worry about the future, and I welcome the opportunity to see PD Ports prosper and grow under new buyers.”

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