With client focus targeting a multipurpose port’s ability to compete within an already well-established market, Moffatt & Nichol performed extensive analyses through a decade of project planning and development.
After initially completing a port master planning study for Limak Investments, Moffatt & Nichol was engaged by UniCredit Bank AG to provide lenders’ commercial and technical advisory services regarding the construction and operation of Limak Iskenderun International Port in Turkey – a multi-purpose port handling a mix of cargo, including automobiles, grain, project cargo and containers. The project involved the construction of a 1.3 million TEU container terminal and bulk/Ro-Ro facilities.
Moffatt & Nichol provided full commercial analysis and market forecast technical due diligence and assistance to the lenders’ advisors with regards to the engineering procurement & construction contract, the operations and maintenance contract, and the required insurance amounts.
The market forecast was based on Moffatt & Nichol’s proprietary Hinterland Growth and Least Cost Market Analysis methodology, used for accurately assessing the extent of the port’s hinterland, its growth prospects and the anticipated market share capture from competing ports. This methodology, complementary to the usual GDP-based market forecast methodology, provided an independent validation to the sponsor’s market forecast, and in the difficult market conditions of late 2011, played a crucial role in providing confidence to the Lenders’ Credit Committees to finance this emerging project.
Moffatt & Nichol’s assessment focused on Iskenderun’s ability to compete within an already well-established market and therefore analysed the port’s market proposition. The overall conclusion was that Iskenderun has significant potential within the Turkish port market, with the possibility for even further development of container volumes and related port revenue streams. Factors such as growing Turkish container throughput, port location, growing demand for efficient deep water port facilities in the Mediterranean and Iskenderun’s ability to handle large containerships all contributed to this conclusion.
Moffatt & Nichol worked closely and collaboratively with the Bank, the sponsor, and key port personnel throughout the project to validate the borrower’s market forecast, revenues, Capex and Opex projections and to ensure international practices were appropriately applied to this US$242 million construction development.
Following this, Moffatt & Nichol was retained by UniCredit to perform ongoing post financial close monitoring services for Limak Iskenderun. Moffatt & Nichol worked as traffic and technical advisor on this project for more than 10 years.
