Hong Kong-listed China Merchants Port has gained a 99-year concession agreement to develop, manage and operate the Sri Lankan Hambantota Port.
Under the agreement, signed with the Sri Lanka Ports Authority, the Sri Lankan Government, Hambantota International Port Group, and Habantota International Port Services Company CM Port will invest up to $1,12bn into Hambantota Port and its related maritime activities.
In a complicated arrangement CMPort will pay $973.7m of the total invested sum for the acquisition of the 85% issued share capital of HIPG. HIPG will spend part of it windfall on a 58% stake in HIPS.
An outstanding $146.3m will be ploughed into Hambantota port and marine related activities, as agreed with the Sri Lankan Government provided such investment are made within a year from the final payment to HIPG.
The latest investment is seen as another significant step in the Belt and Road strategy of CMPort’s parent company China Merchants Group. China Merchants Group has already committed to investing either directly or indirectly in 10 overseas ports in West Africa, Southeast Asia and Russia, including many key strategic locations along the Maritime Silk Road.