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BIZCHINA / Center
COSCO to buy 412 dry-bulk ships
(China Daily)
Updated: 2007-09-05 10:24
China COSCO Holdings Co surged in Hong Kong trading after reaching an
agreement to buy the world's largest fleet of dry-bulk ships for 34.6
billion yuan (US$4.58 billion) in cash and stock to tap the rising
imports of iron ore, coal and grain.
The shipping line will buy 412 vessels from its parent China Ocean
Shipping (Group) Co, it said in a Hong Kong stock exchange statement
yesterday. It will issue 864.3 million Shanghai-listed shares valued at
16 billion yuan to its parent and pay the rest in cash, partly funded by
a share sale.
China COSCO, Asia's largest container shipping line, wants to add
dry-bulk vessels as China's surging imports of raw materials have caused
rates to double in the past year.
Other State-owned companies including SAIC Motor Corp and China Network
Communications Group Corp have also sold assets to listed units to tap
the booming stock market.
For China COSCO, "this is a substantial change in their asset mix and a
very large earnings enhancement", said Geoffrey Cheng, an analyst at
Daiwa Institute of Research.
China COSCO, based in Tianjin, jumped 8 percent to HK$20.55 in the early
afternoon session in Hong Kong, gaining as much as 18 percent.
The company will sell 432.7 million new Shanghai-listed shares to 10
institutional investors, it said, without identifying the potential
buyers. The share sale, which needs government approval, would be worth
9.39 billion yuan, based on the July 25 closing price.
China Ocean Shipping will buy its Shanghai shares at 18.49 yuan each, or
15 percent less than the July 25 closing price.
(For more biz stories, please visit Industry Updates)
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� COSCO Shipping profit up
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