According to a statement and a circular to the Honk Kong stock exchange CSCL will receive 2.78bn shares in China Shipping Terminal Development H.K. Co. valued at CNY3.42bn (US$561m). Parent company China Shipping Group Co. will inject HK$4.1bn (US$529m) into the combined company and maintain a 51% stake.
“The board is of the view that the streamline and consolidation of China Shipping Group’s port businesses and assets into one platform will result in economies of scale as well as a globally integrated port business,” CSCL said in the circular. “The transaction will allow the company to focus on its core business.”
As CM reported at the beginning of November, Shanghai-based CSCL will also sell its stake in a container terminal in Lianyungang, and another in Yangshan port, seeking to restructure and return to profit.
The company had a third-quarter net loss of CKY404m (US$66m).