Maersk Competitors Unite and Manage to Halt Atlantic Sul Shipyard Auction

Filipino Company That Already Operates in the EAS Might Have Joined Forces With a Group of American Businessmen to Compete With the Danes

The auction for the sale of the internal dock of the Atlântico Sul Shipyard, at the Port of Suape in Pernambuco, gains another chapter, when it was thought that the process would finally be concluded. On the day the auction event was set to begin, the Court of Justice in the city of Ipojuca (PE) decided to suspend it, complying with a request from the Filipino company Tecon. The information that has emerged is that the Filipinos, who already operate a terminal at the site, might have joined the consortium North Tabor Capital (which until last week was considered a secret group) to outbid Maersk in the dispute.

Maersk is the world’s largest container operator and originates from Denmark. For some time, the company has been eyeing the Atlântico Sul Shipyard. The Danes have been in talks with the EAS, which is in a state of judicial recovery, and have already revealed that they intend to initially operate 400,000 TEUs (a measure equivalent to a 20-foot container), should they win the auction, also promising to create thousands of jobs.

The initial proposal from Tecon, supposedly in conjunction with the American group of investors, is R$ 1.2 billion for the entire Atlântico Sul Shipyard, along with the promise of bringing two new companies to operate on site and resuming ship production. On the other hand, the proposal presented by Maersk so far is R$ 895 million for the southern dock and an investment of up to R$ 2.6 billion in a new container terminal at the site.

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The Atlântico Sul Shipyard had the idea of conducting sales in parts in this auction, as in 2021 there were no interested parties when the entire land was for sale.

Tecon’s Justification for Suspending the Auction

The Court in Ipojuca had previously rejected another request to suspend the auction, presented by Tecon, and thus, the process was set to begin this week. According to records from that first-instance request, “the plaintiff company argued that compliance with the constitutional principle of isonomy is necessary to ensure equal opportunities; however, the Atlântico Sul Shipyard decided to confer Stalking Horse status to the company APM Terminals B.V. (APMT), a member of the Maersk group.”

Now, however, by interlocutory decision, the judge of the Court of Justice of Pernambuco, Bartolomeu Bueno, requested the suspension of the auction, accepting the justification to observe the constitutional principle of isonomy.

According to the magistrate, “it is determined, at least prima facie, the presence of legal requirements for granting the requested suspension, summarized in the concepts. It is stated in the records that the responding party decided to confer Stalking Horse status to APTM to then initiate the competitive process in focus already with such pre-established condition,” describes the decision.

Stalking Horse is the initial and advance offer that an interested buyer makes to try to close a deal with a company in judicial recovery, granting the prerogative of preference by the opportunity to cover the best offer.

Ship Production Would Not Be a Good Business in the Assessment of the Port of Suape

As mentioned above, the objectives of Tecon and North Tabor Capital are: to bring two new companies to operate at the site and to resume ship production at the Atlântico Sul Shipyard. However, the CEO of the Port of Suape, Roberto Gusmão, does not view the EAS’s continuation in the shipbuilding business favorably.

“It’s like selling ice pops in the North Pole,” evaluated Gusmão. “Let’s wait. We need competition to remain competitive in prices and shipping routes in Suape. Otherwise, we’re out of the game, of the new global logistics matrix that will be formed post Ukraine war and COVID. And the container sector is fundamental to this. It exports and imports products with higher added value. Outside the country and within ports, even more with the new cabotage law,” he states.