Canadian investment entity Ontario Teacher's Pension Plan (OTPP) will pay the Port Authority of New York and New Jersey (PANYNJ) a $51 million 'consent fee' in order for the sale of Orient Overseas International Ltd (OOIL)'s Staten Island terminal to OTPP to go ahead.
OOIL sold four of its North American terminals to the OTPP last year in a high profile $2.4 billion deal. A net profit of $1 billion for OOIL was riding on the completion of the sale.
Negotiations on the transaction had been sidetracked due to a demand from the port authorities for the payment of a 'consent fee' in excess of $50 million, including a guaranteed sum to prevent the lease from being sold again for a quick profit.
The agreement between OTPP and the port authority means the final hurdle for the transaction has been cleared.
The PANYNJ port authority has issued a statement saying that the "agreement will protect the port authority's significant public investment in Staten Island's maritime facility and will ensure the long-term health and growth of the port.
"OTPP, through its operator, New York Container Terminal Inc has committed a total of $51 million to this transaction, including at least $30 million in capital expenditures on the terminal during the lease period."
The PANYNJ also said that the New York Container Terminal will pay $16 million in cash to the port authority, which will be reinvested in port infrastructure, and will reimburse the port up to $5 million in expenses incurred for future roadway access to the terminal, reported Cargonews Asia.
Under the agreement, OTPP will acquire the remaining 12 years of the Howland Hook lease from OOIL.
The port authority said these commitments "will ensure that the port terminal continues to prosper, and provide job growth and economic activity for Staten Island and the region for years to come."
OOIL sold four of its North American terminals to the OTPP last year in a high profile $2.4 billion deal. A net profit of $1 billion for OOIL was riding on the completion of the sale.
Negotiations on the transaction had been sidetracked due to a demand from the port authorities for the payment of a 'consent fee' in excess of $50 million, including a guaranteed sum to prevent the lease from being sold again for a quick profit.
The agreement between OTPP and the port authority means the final hurdle for the transaction has been cleared.
The PANYNJ port authority has issued a statement saying that the "agreement will protect the port authority's significant public investment in Staten Island's maritime facility and will ensure the long-term health and growth of the port.
"OTPP, through its operator, New York Container Terminal Inc has committed a total of $51 million to this transaction, including at least $30 million in capital expenditures on the terminal during the lease period."
The PANYNJ also said that the New York Container Terminal will pay $16 million in cash to the port authority, which will be reinvested in port infrastructure, and will reimburse the port up to $5 million in expenses incurred for future roadway access to the terminal, reported Cargonews Asia.
Under the agreement, OTPP will acquire the remaining 12 years of the Howland Hook lease from OOIL.
The port authority said these commitments "will ensure that the port terminal continues to prosper, and provide job growth and economic activity for Staten Island and the region for years to come."