China Shipping Development pays HKD1 billion to boost stake in Beihai Shipping
September 30, 2014 Category Logistics, Ports & sea transport
China Shipping Development, the country’s largest tanker operator by fleet size, is acquiring a 20% stake in Shanghai Beihai Shipping for HKD1 billion from parent China Shipping (Group) in a bid to capitalize on the growth of hauling petroleum along China’s coast and inland waterways. The latest purchase raises China Shipping Development’s shareholding in Shanghai Beihai to 40%. In June, it bought a 20% stake in Beihai from Sinochem International Corp. Other Beihai shareholders include CNOOC Petrochemical Import & Export, with 30%, Silverbond Overseas with 20% and China Ocean Oilfields Services (Hong Kong), another CNOOC subsidiary, with 10%. China Shipping Development, which also has one of the world’s largest dry-bulk fleets, said in a statement to the Hong Kong stock exchange that the transaction would “further entrench its position in the coastal and domestic crude oil shipping market” in China and enhance its relationship with CNOOC, the firm’s major customer. Beihai, which owns a fleet of eight tankers, was forecast to generate HKD455 million and HKD472 million in net profit for 2014 and 2015, respectively. China Shipping Development will be compensated by an indemnity clause with its parent should Beihai’s profits fall short of the projection. China Shipping Development recorded CNY39 million in net profit for the first half of this year, reversing huge losses from a year ago.
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