Port Saga

Jan 11, 2012 (LBO) – China Merchant Holdings (International), and state-run Sri Lanka Ports Authority may buy parts of a 30 percent stake in a container terminal project at Colombo port held by private listed Aitken Spence, a media report said. China Merchants is already the dominant partner a 55 percent stake and the SLPA has a 15 percent stake.

Bloomberg newswires, a news service, citing an unidentified source said China Merchants is considering acquiring a part of Aitken Spence’s stake and the SLPA may also up its stake.

Sources familiar with the deal said Aitken Spence was forced to pull out because a 350 million dollar loan from China Development Bank fell through at the last minute requiring additional funding from consortium partners.

CDB had asked for tight conditions including a Sri Lanka government guarantee, which was unavailable, the source said.

China Merchants had said it will pump in money for the 600 million dollar project, provided other partners did the same, which was difficult for Aitken Spence.

The construction contract of the port went to China Harbour Engineering Company, also a Chinese state run firm.

Aitken Spence stock closed up 115.00 rupees up 80 cents Wednesday.