LISTED port operator International Container Terminal Services, Inc. (ICTSI) announced on Monday that its subsidiary Abbotsford Holdings, Inc. had signed a partnership deal with Pampanga-based Prime Alta Holdings, Inc. to operate a freight forwarding and logistics business.
The two companies will form Fortune Logistics Corp., which will “primarily operate, engage in and carry on the business of domestic and international ocean, air and land freight forwarding and logistics,” ICTSI said in a disclosure to the stock exchange.
The joint venture aims “to reduce costs and improve operational efficiency associated with the processing of cargo that are intended to be used by ICTSI for its various operations in the Philippines,” it added.
Abbotsford, a wholly owned subsidiary of the Razon-led company, and Prime Alta target to obtain regulatory permits and licenses within one to two months after the signing of the shareholders’ agreement for the joint venture.
The joint venture’s initial capitalization is P25 million, with a 51:49 ownership split.
Abbotsford will own 51% or P12.75 million from the initial subscription while Prime Alta will own 49% or P12.25 from the initial subscription.
“The joint venture company will distribute a percentage of its available distributable cash flow and such dividends will be paid to the shareholders pro rata on the basis of their respective shareholding,” ICTSI said.
Its board of directors will be tasked to oversee the management and operations of the joint venture company in which Abbotsford will appoint three directors and Prime Alta will appoint two.
ICTSI’s net income attributable to equity holders for the first half of the year reached $294.5 million, 50% more than the $196.7 million it earned in the first half of 2021.
The improvement was “primarily due to higher operating income; higher net foreign exchange gain, increase in equity share in net profit of joint ventures; and strong contribution of new terminals; partially tapered by an increase in depreciation and amortization, and interest on loans, concession rights payables and lease liabilities,” the company said. — Justine Irish D. Tabile