Investments in Partially Owned Entities

12 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments in Partially Owned Entities

Investments in Partially Owned Entities

As of December 31, 2020, our investment in partially owned entities accounted for under the equity method of accounting presented in our Consolidated Balance Sheets consists of the following (in thousands):

Joint Venture	Location	% Ownership	December 31, 2020
Superfrio	Brazil	14.99%	$23,269
Comfrio	Brazil	22.12%	$21,638

Superfrio Joint Venture

During the first quarter of 2020, the Company purchased a 14.99% equity interest in a joint venture with Superfrio Armazéns Gerais S.A. (“SuperFrio” or “Brazil JV”) for Brazil reals of R$117.8 million. Including certain transaction costs, the Company recorded an initial investment of USD $25.7 million in the joint venture. SuperFrio is a Brazilian-based company that provides temperature-controlled storage and logistics services including storage, warehouse services, and transportation. The debt of the unconsolidated joint venture is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations.

Comfrio Joint Venture

As a result of the Agro acquisition which closed on December 30, 2020, the Company acquired Agro’s 22.12% share of ownership in Agrofundo Brazil II Fundode Investimento em Participações (“FIP”) or the “Comfrio” joint venture. The FIP owns all the issued and outstanding shares of common stock of Agro Improvement Participações S.A. (“Agro Improvement”), a sociedade anônima, duly organized and existing under the laws of Brazil. The Company has a call right that enables it to purchase all the issued and outstanding shares of Agro Improvement starting on January 1, 2019 through January 7, 2023. The FIP has a put right that requires the Company when exercised to purchase from it all the issued and outstanding shares of Agro Improvement starting on July 1, 2019 through January 7, 2023. The fair value of the call and put rights will be recorded through acquisition accounting finalization during the measurement period, and was not included in the preliminary acquisition accounting as of December 31, 2020.

The debt of the unconsolidated joint venture is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations.

China Joint Venture

During 2010, the Company, through its wholly owned subsidiaries, made total cash investments of $46.2 million in two newly-formed Hong Kong entities, China Merchants Americold Holdings Logistics Company Limited (CMAL) and China Merchants Americold Holdings Company Limited (CMAH, together with CMAL, the Joint Venture, or China JV). Through these subsidiaries, the Company acquired a 49% interest in the Joint Venture, while China Merchants Holdings International Company (CMHI) acquired the remaining 51% interest in the Joint Venture.

During the third quarter of 2019, the Company completed the sale of its equity interest in its China JV to an affiliate of its joint venture partner for total cash consideration of $15.0 million. The resulting gain on the sale of

the China JV totaled $4.3 million and is included in “Gain from sale of partially owned entities” on the accompanying Consolidated Statements of Operations. The gain recorded includes $2.6 million related to cumulative foreign currency translation historically recorded through Other Comprehensive Income which stemmed from the remeasurement of the foreign denominated equity-method investment in the China JV. The following tables summarize the financial information of the Company’s China JV for the periods presented, prior to disposition.

The condensed summary financial information for the Company’s China JV is as follows for the portion of the year which the Company held ownership interest in the China JV during 2019 and the full year ended December 31, 2018:

	2019
Condensed results of operations	CMAL		CMAH		Total
	(In thousands)
Revenues	$	28,334	$	10,907	$	39,241
Operating (loss) income	$	(348)	$	1,920	$	1,572
Net (loss) income	$	(507)	$	1,018	$	511
Company’s (loss) income from partially owned entities	$	(429)	$	318	$	(111)

	2018
Condensed results of operations	CMAL		CMAH		Total
	(In thousands)
Revenues	$	37,458	$	13,621	$	51,079
Operating (loss) income	$	(1,748)	$	2,432	$	684
Net (loss) income	$	(1,960)	$	1,651	$	(309)
Company’s (loss) income from partially owned entities	$	(1,419)	$	350	$	(1,069)

In addition to the China JV, the Company had an investment in a joint venture accounted for under the equity-method, for which a complete return of capital totaling $2.0 million was received during the first quarter of 2019, eliminating the Company’s involvement in the joint venture.