Port of South LA to Reevaluate Purchase of Avondale Global Gateway, Potential Price Reduction
The Port of South Louisiana has announced its return to the negotiating table for the proposed purchase of the Avondale Global Gateway, signaling a potential decrease in the controversial $445 million price tag for the former shipyard based on new financial studies.
In a news release issued on Friday, port officials revealed that the current owner of Avondale, T. Parker Host, has agreed to extend the review period until August. This extension allows analysts hired by the port to complete their analysis on the financial viability of the deal.
Port of South Louisiana CEO Paul Matthews stated, "Once the feasibility analysis is complete, we will negotiate final terms of the acquisition, including price. The additional time Host is providing Port SL allows our experts to complete their work."
Approval from the Bond Commission will be necessary for the deal to proceed, as the port will need to issue state-sanctioned bonds. This process requires hiring independent consulting firms to conduct feasibility, engineering, and environmental studies.
The port had previously announced in May that it had engaged Pennsylvania-based industry consultant Martin & Associates to conduct the feasibility study. Other firms have been retained for environmental and engineering studies.
"The property was placed under contract at an appraised value," the port stated in the news release. "The final price will be negotiated based upon the results of the feasibility analysis."
As of Friday, the feasibility study had not been submitted, according to a spokesperson for the Bond Commission. This marks the fourth extension of the due diligence period between the port and Host. Paul Matthews, who assumed the position of CEO at the port in 2022, emphasized the importance of ensuring a fair final price.
"We are taking our time to analyze every aspect of this potential acquisition," he explained. "We will ensure the state of Louisiana gets the best deal possible."
Host CEO Adam Anderson expressed the company's commitment to working with the port to finalize the deal in the port's news release.
It remains uncertain whether the delays in closing the deal, initially scheduled for completion before the summer, will result in any financial penalties for the port.