3SIIF makes its first investment in the port sector

The Three Seas Initiative Investment Fund S.A. SICAV-RAIF (‘3SIIF’, ‘the Fund’) has acquired a significant interest in BMF Port Burgas EAD (‘BMF Port Burgas’, ‘the Port’), a major port operator in the Port of Burgas in Bulgaria, from Advance Properties OOD, who will retain a majority interest. The investment is subject to merger control approval.

BMF Port Burgas, which comprises Port Terminal Burgas East II and Port Terminal Burgas West, operates under two long-term concessions granted by the Bulgarian government.

The investment in BMF Port Burgas, is well aligned with the Fund’s objective to improve connectivity within the Three Seas Region. The Port of Burgas is an important infrastructure asset connecting the Three Seas Region with Central Asia and the Middle East, strategically located on the Black Sea coast and is the closest European Union port to the Bosphorus. The Port of Burgas also acts as the primary maritime gateway to Sofia and Plovdiv, Bulgaria’s most developed and industrialised cities, through direct rail and road connections. The investment will strengthen EU integration by decreasing infrastructural gaps and delivering broader economic benefits to the Region by improving connectivity and increasing the Port’s capacity.

BMF Port Burgas offers a significant opportunity for the Fund to support the long-term growth of the port with substantial follow-on investments to expand capacity and capabilities. These investments include the extension of existing berths, the construction of new berths, the further modernisation of facilities, and the ability to handle new types of cargo. The long-term growth of BMF Port Burgas will support existing and create new industrial production capabilities in Bulgaria and the region, with producers and  exporters benefitting from the port’s wide range of activities and service excellence.

The investment in BMF Port Burgas represents 3SIIF’s fourth investment and its first direct investment in Bulgaria. Since March 2020, the Fund has made a number of investments: the acquisition of Cargounit, Poland’s leading locomotive leasing business; the financing of the construction of the most advanced Tier3/Tier 4 data centre in the Baltics, through its investment in Greenergy Data Centers in Estonia; and the acquisition of a majority interest in Enery, a renewables developer in the region with a pipeline of over 3GW of renewable generation projects.

Christian Roy, Investment Director at Amber Infrastructure, noted: “The investment in BMF Port Burgas is an exciting opportunity to support the further growth of the Port in accordance with the Fund’s objectives. It also marks the first port sector investment of the Fund and the first direct investment in Bulgaria. The further development and continued modernisation of the Port will play a key role in filling the transport infrastructure gap in the southeast part of the Three Seas Region while delivering broader economic benefits to Bulgaria and the Region”.

Georgi Domuschiev, Founder and Managing Director of Advance Properties OOD, said: “We are very pleased with the transaction, which is a great success and an excellent opportunity for the Port.  For more than 10 years now, BMF Port Burgas has been substantially investing in the modernisation of the port terminals in pursuance of its growth objectives. The continuing development of modern concepts for port activities and services through sustainable and responsible investments in partnership with 3SIIF, will make a meaningful contribution to the transport integration and diversification in the region”.

IMPORTANT NOTICE

This announcement does not constitute or form part of, and should not be construed as, an offer, invitation or inducement or recommendation to make an investment nor shall it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

Advance Properties OOD

Advance Properties OOD is one of the largest private companies in Bulgaria in terms of revenue with investments in Bulgaria and around the globe. Its diversified portfolio comprises investments primarily in pharmaceuticals, shipping, port operations and management, and real estate.

Advance Properties is headquartered in Sofia, Bulgaria, with investments in more than 100 subsidiary companies in 26 countries around the world.

BMF Port Burgas

BMF Port Burgas is the private, multipurpose port operator of Port Terminal Burgas East II and Port Terminal Burgas West. Situated in the region of Burgas Bay, along the Black Sea coast, BMF Port Burgas operates the closest deep-water port to the Bosphorus. Offering excellent nautical access, Port of Burgas is an important logistic node on Trans-European Transport Corridor VIII and a primary maritime gateway in the TRACECA network connecting Europe with Central Asia. The Port’s location enables BMF Port Burgas to serve major clients in Bulgaria’s key industries as well as consumption centres.

Operating under two concession agreements with Bulgaria’s Ministry of Transport and Communications, BMF Port Burgas has developed a strong track record in port services and client acquisition over the past decade. Completed strategic investments include the development of dedicated container, copper concentrate, LPG, sulfuric acid, grain and project cargo facilities, with various developments currently in the pipeline. Such developments have enabled BMF Port Burgas to become Bulgaria’s primary maritime gateway, handling around 7 M tons of cargo in 2021.

Port Terminal Burgas East II is one of the largest port terminals on the Black Sea coast with unique potential for cargo handling and storage. The terminal comprises nine berths and five piers. With total quay length of 2,145 meters and maximum draft of 14.6 meters, the terminal is capable of receiving a wide variety of vessels providing its clients with excellent opportunities to capitalise on economies of scale.

Port Terminal Burgas West has six berths with total length of approximately 1,188 m. The area houses a fully rehabilitated container terminal which realised a significant increase in annual traffic of 75% from 2016 to 2020.