As the Romanian edition notes Profit.ro The National Company “Administration of Constanta Sea Ports” (APM), controlled by the Romanian state through the Ministry of Transport, with a capital share of 80%, has submitted a binding offer of about $62 million at the tender for the sale of ICS Danube Logistics, operator of the Giurgiulesti port in Moldova. The European Bank for Reconstruction and Development (EBRD) is the sole shareholder of the latter, Profit.ro reported.
In addition to the amount of $62 million, which represents only the purchase price of ICS Danube Logistics, APM has committed to invest at least $28 million in the Giurgiulesti port.
The Board for the Review of Investments Important to Moldova’s State Security approved APM’s investment on July 11, guided by an application submitted by the Port of Constanta. The deal has not yet been finalized and the money has not been paid to the seller. If APM wins, the agreed purchase price will not be paid until December 31, 2025 or within the next year.
However, the minority shareholder of the Port of Constanta, Fondul Proprietatea (FP, which holds 20% of the shares), has asked the Romanian courts to annul the June 19 decision of APM’s annual general meeting of shareholders, which approved a binding offer to acquire the Giurgiulesti port operator.
The lawsuit is pending and the date of the first court hearing has not yet been set.
FP also applied for suspension of the decision of the annual general meeting of shareholders until the case is considered on the merits. However, its motion was rejected at first instance, as the court considered that “the plaintiff has not proved urgency in the form of imminent and irreparable damage, the measure for which the suspension is sought is hypothetical and does not constitute certainty of an acquisition agreement, and the defendant has only submitted a binding tender offer”.
“The plaintiff (FP – ed.) asked the court to note that the $62 million figure is based on an optimistic scenario presented by the management of ICS Danube Logistics itself, according to the assumptions set out in the business plan, without material adjustments and without the opinion of PWC (the consultant hired by APM for the acquisition) as to the feasibility of the business plan and the assumptions on which it was made by the seller. For example, this business plan assumes that the volumes handled by the acquired company will increase by 80% by 2030, primarily due to a doubling of grain handling volumes, although even in the previous year, the handling volumes of the Danube ports owned by the Ministry of Transport, as well as the Giurgiulesti port, had significantly decreased due to the reduction of cargo flows related to Ukraine,” reads the statement of claim analyzed by Profit.ro.
FP also claims that the price in the binding offer was based on an EBITDA (earnings before taxes, interest and depreciation and amortization) margin of more than 60% in the long term. This is more than 10% higher than the margin recorded in 2024, and assumes the maintenance of margins from the peak years of operations, which benefited from a favorable geopolitical situation, namely the redirection of cargo flows from Ukraine, which is no longer relevant today.
“Neither PWC nor APM management specifically analyzed the strategic opportunity for APM to acquire the Giurgiulesti port and how this acquisition could benefit APM in the context of Ukraine’s recovery. The arguments presented in the binding proposal regarding the strategic opportunity for this acquisition were not accompanied by the consultant’s analysis supporting the thesis of an investment in the Port of Giurgiulesti. In this regard, in the opinion of the company, there are significant signs of overvaluation of the binding offer submitted for approval, which may cause damage to the company and its shareholders,” the documents say.
In addition, FP claims that “the financing of the acquisition is done by increasing the share capital, which constitutes illegal state aid.”
In its response, APM said the binding offer was submitted “after intensive and extensive negotiations between the parties” during several successive meetings at the level of experts and representatives. “(…) the Respondent argued that (…) the acquisition of the Giurgiulesti Port would bring significant benefits to APM and the Romanian State, including higher profits and higher dividends in the future for shareholders. He also emphasized that an investment in the Giurgiulesti Port is far more beneficial to Defendant and the Romanian State than any other investment currently available on the market. (…)
(…) pursuant to the preliminary binding offer, in the non-binding offer and subsequently in the initial and revised binding offer, APM SA indicated that the funds would be its own. Separate from this issue, the Romanian government has agreed to initiate steps to capitalize the company for this project and other investment projects that will follow ReArm Europe, which means dual infrastructure for both civil and military transport. In this context, it shows that the claimant (FP) will be obliged, in the case of an increase in the share capital, to increase its contribution (…), in fact to contribute the cash generated by the dividends it received (…). Or, obviously, the plaintiff does not want to make such a transaction, he never participated in the share capital, neither with his own money nor from the dividends received.
“And for these reasons, the company strongly rejects any attempt to reduce its profits for this year and next year,” APM said, according to the documents. FP, for its part, said it has “participated in many transactions and conducted share capital increase transactions to support the company, to the extent that it considered such acquisitions to be profitable.”
Fondul Proprietatea also complained that the potential acquisition of the Giurgiulesti port operator entails numerous risks, including: the right to operate the port expires in 2030, as well as the special tax incentives currently enjoyed by the operator; EBRD shares are seized and there are ongoing legal actions regarding their ownership; 25 of the operator’s buildings are under seizure; and there are potential environmental risks associated with the improper storage of sludge generated by the operator’s operations; and the potential risk to the environment associated with the acquisition of the Giurgiulesti port operator.
APM responded to these objections by indicating that all the risks mentioned by FP were taken into account when preparing the binding proposal. Thus, according to the Romanian state-owned company, the elimination of some of them, such as the favorable settlement of various disputes, was included in the offer as a precondition of the transaction, while with regard to others it was agreed that, should they arise, certain amounts would be deducted from the agreed price.
″(…) Moldovan legislation provides for a free zone regime until 2030, and after that it is unclear whether the treaty provision can be translated into national legislation. If Moldova joins the European Union, there will be problems, so a new condition precedent has been introduced with the retention of the 10 million amount.
APM also emphasizes that PricewaterhouseCoopers has identified a number of risks that have been translated into price adjustments. For example, there are many rules related to environmental protection and at the time of accession, all identified environmental issues are translated into either fines or liabilities that can be codified in money. All these obligations, fines and other aspects have been codified and removed from the price.
“Thus, at the moment, there is a very clearly elaborated mechanism by which preconditions are established, without which the contract cannot be signed, derogations are granted, i.e. the defendant pays part of the amount, part is withheld, and when all conditions are met, the difference is paid,” said the National Company “Constanta Seaport Administration” S.A.
