Busan is good

Macquarie to Invest in Busan Port

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Macquarie Korea Infrastructure Fund (MKIF) has decided to invest 259.4 billion won in the Busan New Port Container Terminal (BNCT), an MKIF spokesman said Wednesday. The BNCT is the concession company with the rights to develop, operate and maintain the Busan New Port (BNP).

BNP is currently being developed as the key part of a national priority port project named Busan New Port, which is intended to meet future demand driven by Busan's position as a regional shipping and logistics hub.
The concession rights are for 29 years and three months from the date of the commencement of the operation and is being granted by the Ministry of Maritime Affairs and Fisheries. Construction is expected to take 48 months with the target operation commencement in early 2012.

The investment, funded by MKIF's available cash and loan facility, will consist of 30 percent equity, or 66.4 billion won of the available equity in BNCT, making MKIF the largest shareholder, and 100 percent of subordinated debt, or 193 billion won, raised by BNCT. The draw down for the investment will be made over the construction period.

The investment is anticipated to be accretive to MKIF in terms of cash yield and investor returns. The interest rates on this 25-year subordinate debt are 10 percent and 12 percent during the construction period and the operation period, respectively. The principal repayment will start after the 20th year from the first draw down. The investment will comprise approximately 11 percent of MKIF's portfolio, and financial closing is expected to occur in late January 2008.

The Source of News: The Korea Times (January 02, 2008)