Global ports operator International Container Terminal Services, Inc. is venturing into the freight forwarding and logistics business through a joint venture with Prime Alta Holdings Inc.
In a disclosure to the Philippine Stock Exchange, ICTSI said its subsidiary Abbotsford Holdings Inc. has forged a business partnership with Prime Alta for the formation and establishment of a joint venture company in the Philippines.
To be named Fortune Logistics Corporation (subject to the approval of the Securities and Exchange Commission), the JV Company shall primarily operate, engage in and carry on the business of domestic and international ocean, air and land freight forwarding and logistics.
“The parties shall register the JV Company with the SEC and obtain approval for its incorporation and commence operations immediately thereafter,” said ICTSI.
It added that, SEC approval and other standard regulatory permits and licenses are targeted to be obtained within one to two months from the signing by the Parties of the Shareholders’ Agreement for the Joint Venture.
“The rationale for the transaction is 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,” ICTSI said.
In addition, ICTSI said it is also looking at potentially utilizing these services on an arm’s length basis to other stakeholders and related parties of ICTSI.
The amount of initial capitalization of the JV Company is P25 million with Abottsford owning 51 percent and subscribing to an initial P12.75 million worth of shares while Prime Alta will subscribe to P12.25 million worth of shares for its 49 percent ownership.