Dubai based Tristar picks up majority stake in HK firm for $215m
Glencore to remain invested in Hong Kong-based HG fuel storage services
Dubai: The Dubai-based logistics company Tristar Group struck a deal with Madison Pacific to acquire a 51 per cent stake in HG Storage International ltd (HGSI).
HGSI is a global portfolio of petroleum products storage and logistics businesses. Its terminals offer storage and distribution of various products. HGSI is a joint venture between Hong Kong-headquartered HNA Group and Glencore Group Funding ltd. Glencore is one of the world’s largest globally diversified natural resource companies.
Once the deal is finalised, Tristar will acquire a majority holding in a well-diversified portfolio of oil storage, distribution and retail assets owned by HGSI. The storage company comprises 8 operating assets across 4 regions: Europe, the Americas, the Middle East and Africa. The transaction, valued at $215 million, will add in excess of 3 million cubic meters of fuel storage capacity to the Tristar portfolio and expand the company’s global presence to 29 countries around the world.
Currently Tristar has fuel storage in the Pacific, Central America, North America, Africa and the Middle East.
“It is about growing our revenue streams,” said Eugene Mayne, CEO and founder of Tristar. “Fuel storage is an integral part of our integrated logistics, so it is very much part of our global supply chain offering”
We have maritime logistics, we have first-mile and last-mile trucking and we have fuel storage for load port and discharge port operations. So, it is very much part of our model of fuel storage.
Following the transaction, Glencore will remain as a key strategic shareholder of HGSI and a joint venture partner to Tristar.
“It is a great opportunity to expand our business,” said Mayne. “And the collaboration with Glencore can only help us to expand not only our geographical footprint but also our client base.”
The deal is expected to be finalized by the end of second quarter and is subjected to certain regulatory filings and approvals, and stakeholder consents. The company plans to raise funds with debt and equity.
Tristar was advised by Acqua Capital (financial advisor) and Freshfields Bruckhaus Deringer (legal advisor). Madison Pacific was advised by PricewaterhouseCoopers (financial advisor) and Stephenson Harwood (legal advisor).