Now It’s Who Pays More: Pernambuco Court Starts Auction for Atlântico Sul Shipyard Where Companies Try to Outbid Maersk

They Were Months of Controversies and Analysis of Judicial Processes Until the Beginning of the Auction Process Actually Happened, Bringing Hope to the Local Economy

The Justice of Ipojuca, a municipality on the southern coast of Pernambuco, neighboring Cabo de Santo Agostinho, where the Port of Suape is located, began receiving proposals from companies interested in two areas that the Atlântico Sul Shipyard is offering. The company has been in Judicial Recovery since 2020 and needs to settle a debt of about R$ 1.4 billion with the National Bank for Economic and Social Development (BNDES). The auction is marked by several controversies and a difficult attempt to surpass Maersk, which has already taken the lead in the competition.

It happens that the Danish group Maersk, through its member APM Terminals B.V. (APMT), had already been in talks with the management of the Port of Suape. Furthermore, it was the first to submit a purchase proposal for the Atlântico Sul Shipyard. The other interested group is Tecon Suape, based in the Philippines and already operating at the site. As a strategy to defeat the powerful Danes, it allied with Cone Suape, forming a consortium that launched a bid of R$ 450 million, covering R$ 150 million more than the initial proposal from APM Terminals.

It is worth noting that the Danes have up to three days to cover the proposal from their competitors in the auction. This is one of the benefits of having the Stalking Horse right. This condition was established because the Atlântico Sul Shipyard, through legal justifications provided in the notice, chose Maersk for the right of first offer on its assets (total or partial). Thus, determining the base offer, so that other competitors cannot offer amounts below.

Tecon questioned this choice, arguing that adherence to the constitutional principle of isonomy was necessary to ensure equality of opportunities in the bidding process. The justification was initially accepted, but the Pernambuco Court of Justice later changed the decision and then set the date for the start of the purchase process. According to the Port of Suape, Tecon had not even visited the land that has access to the sea. The final result of the Atlântico Sul Shipyard auction is only expected to be announced next week.

What Each Group Aims to Do at EAS

The proposal from the Danes at Maersk is to invest up to R$ 2.6 billion in a new terminal for the movement of 400,000 containers at the site. The Filipinos, on the other hand, are aiming to resume ship manufacturing at the site, while Conepar, another competitor that controls Cone Suape, could make various investments on the land, including a possible TUP.

The operation of TEUs is seen by the presidency of the Port of Suape as more interesting from a profitability standpoint, compared to manufacturing and repairing vessels. And with the Brazilian real devalued against the dollar, the possibility of purchase by an international group is greater.

The Government of Pernambuco, which controls the port complex, has already declared its support for Maersk’s proposal before the auction began, understanding that the new terminal would bring competition to the Filipinos, as the Port of Suape receives most of its revenue from the rental fees paid by Tecon Suape, the winner of an international bidding in 2001.

Currently, the Atlântico Sul Shipyard has about 500 employees. Between 2007 and 2014, the entire EAS generated more than 11,000 jobs. At that time, the state of Pernambuco was pointed out as being in a state of almost full employment (when the unemployment rate does not exceed 6%), until it succumbed after the general decline of the shipbuilding industry.

In 2021, the Shipyard carried out services on 11 vessels, generating revenues of R$ 65.4 million, resulting in a net cash generation of R$ 26.6 million. The enterprise is managed by the contractors Queiroz Galvão and Camargo Correa.