Shekou Container Terminals - Phase II

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The joint venture formed by state-owned China Merchant Holdings, P&O Ports, Swire Pacific and Modern Terminals Limited (MTL) won a 50-year concession to build and operate the Shekou Container Terminal – Phase II (SCT2) at the Shekou Industrial Zone in Shenzhen, China. The construction of SCT2 was initiated in July of 2002 and the terminal was expected to became fully operational by the end of 2003. The potential capacity of the new terminal will be 500,000 teu bringing the potential combined capacity of Shekou Container Terminal Phase I and II to 1.8 million teu. The Wharf Group's 55.34 percent-owned subsidiary MTL Shekou Holdings entered into an agreement with Swire and P&O to form an investment vehicle to take 49 percent of the venture. China Merchants held the remaining 51 percent. The joint venture announced a total investment of US$205.4 million in the project. One-third of the investment was in the form of shareholders equity over two years and the remainder was raised through financing. In April 2004, the Wharf Group's 55.3%-owned Modern Terminals bought a 7.5% stake in phase one of Shekou Container Terminals from Swire for HK$203.18 million, and another 2.5% from P&O. It also sold 7.48% in phase two of the Shekou Container Terminals project to Swire for HK$128.44 million and another 2.05% to P&O. None None