Finding Port-Development Partner Amid Recession

Black Sea provides access to Central Asian oil reserves

We worked with an investor group in Eastern Europe to find a development partner for their deep-water port project. The prospects for success were seemingly dim. In 2009—when we began the project—the world was deep in recession, the market for infrastructure projects was all but frozen, and most investors were not interested in assuming direct portfolio risk. Global operators in the highly cyclical port business were relying on a few profitable facilities to subsidize the rest of their holdings.

Commitments. We set out to find a transaction partner, conducting some 40 meetings across 18 countries. Our short list of candidates—willing and able to make a commitment—was made up entirely of Asia-based corporates. The response validated our hypothesis that those most likely to have an appetite for the risk would also be based in developing economies. Our behind-the-scenes efforts included development of a comprehensive project dossier.

Summary Points

Follow-Through. The effort resulted in a major corporate enterprise signing a letter of intent to develop the port facility. Our work on this project also provided the client an unexpected benefit. We identified prospective names to back other local direct-investment opportunities, such as hydroelectric power and coal mining.

Note: This work was completed by our principal at a now-dormant firm. The featured image depicts the seaport at Batumi, a facility on the Black Sea unrelated to this transaction.

Banner Image: Aragami12345 at Can Stock Photo Inc.