domingo, 21 de septiembre de 2008

AIG troubles aren't expected to affect Ports America

The troubled insurer is one of 80 partners that hold a stake in several U.S. seaports, says the head of the group that manages those facilities.

Source: By Ronald D. White, Los Angeles Times Staff Writer

Dismissing rumors of a sale of troubled American International Group Inc.'s cargo terminal operations at several U.S. seaports, the head of the group that manages those facilities said Thursday that they were insulated from AIG's financial troubles and wouldn't be put on the auction block.

"We are legally and financially separate," said Stephen Edwards, chief executive of Iselin, N.J.-based Ports America Group, which is owned by the private equity firm AIG Highstar Capital.


Edwards said AIG holds less than 10% of the $3.5 billion in the High Star III Infrastructure investment fund, along with 79 other limited partners, "so we could not be sold off to meet AIG's financial obligations."

Port watchers became concerned after New York-based AIG got an $85-billion bailout Tuesday from the Federal Reserve with the expectation that the $1-trillion insurance conglomerate would sell assets over the next two years. AIG bought the terminal operations last year from Dubai Ports World after a political uproar forced the sale of the U.S. assets; the prospect of another foreign buyer eyeing the unit has been met with unease on the waterfront.

The terminals represent some of the fund's most valuable holdings, experts said, and would be keepers even in a year in which forecasters are predicting a 6% decline in trade at the nation's biggest seaports. The terminals mainly are large staging areas that act as moving and temporary storage facilities for ship-borne imports to the U.S. and exports headed abroad.


"This is hard infrastructure. These are long-term assets for long-term returns. These are not the kind of assets you would put up in a fire sale," said Paul Bingham, managing director of trade and transportation markets for Global Insight.

The terminals are relatively safe from new competition, which helps their asset value.

"You're talking about a scarce resource. No one will be building new seaports in the U.S. There is no waterfront land available," said Asaf Ashar, a professor with the National Ports and Waterways Institute at the University of New Orleans.

AIG's purchase from Dubai Ports World involved terminals at ports in New York/New Jersey, Philadelphia, Baltimore, Miami, New Orleans and Tampa, Fla., and cargo services at several other harbors.

Ports America has grown so rapidly from recent acquisitions that it says it's the nation's biggest terminal operator, with 97 facilities at 50 seaports in the U.S., Mexico and Chile.

If AIG tried to divest its seaport investments, Ashar said, foreign terminal operating companies in China and Singapore might be leery of drawing the same ire as Dubai Ports World did.

SSA Marine, a division of Carrix Inc., in which Goldman Sachs Infrastructure Investment Group holds a minority stake, was mentioned as a potential suitor. (SSA Marine is Ports America's chief domestic competitor.)

Spokesmen for SSA Marine and Goldman Sachs declined to comment.

ron.white@latimes.com

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