Shareholding Structure Changes In Port Operations And Regulatory Clearance In Mergers And Acquisitions

Introduction

In mergers and acquisitions (“M&A”) transactions, obtaining clearance from the relevant sectoral regulatory authority is required depending on the nature of the target company’s operations. In the port operations sector, whether the target company provides pilotage and/or towage services is the critical distinction that directly determines whether clearance from the Ministry of Transport and Infrastructure (the “Ministry”) is required for shareholding structure changes.

The Regulation on Pilotage and Towage Services (the “Regulation”) subjects changes in the shareholding structures of operators providing pilotage and towage services and port facility operators to a regulatory oversight mechanism. The Regulation was enacted pursuant to Supplementary Article 1 of Law No. 618 on Ports (the “Law”), the Cabotage Act (Law No. 815), Law No. 4046 on Privatisation Applications and Presidential Decree No. 1.