China’s COSCO Group said Monday it’s proposing to shuffle assets to help
boost results in 2013 and reduce the risk of its
stock being suspended from trading on the A-share market in Shanghai.
In an announcement Monday, China COSCO Holdings Company Ltd., which is listed on both the Shanghai and Hong Kong stock exchanges, said it had “put forth a preliminary proposal” to sell a 100-percent interest in its directly-owned subsidiary COSCO Logistics Co., Ltd. (COSCO Logistics) to its controlling shareholder China Ocean Shipping (Group) Company (COSCO Group).
“The board of directors has approved commencing with related processes,” the company said. “Details of the proposed transaction are still in negotiation. Given the uncertainties surrounding it, all investors are advised to pay attention to the investment risks involved. The Group will make public announcement on the progress of the proposed transaction in due course.
“In order to protect the fundamental interest of shareholders, China COSCO has prudently come up with this proposal after a comprehensive consideration on its sustainable growth capability and profitability, the company added. “The group expects that if the transaction is approved and carried out on a timely basis, it will generate reasonable capital gain which can help boost the group’s operating results in 2013 and reduce the risk of its stock being suspended from trading on the A-share market.
The company said it was “upbeat about China’s and the global macro-economic environment and international trade in the long run. It firmly believes that the shipping industry will stage a rebound from the trough and move in an uptrend. Moreover, COSCO Group reiterates that it will continue to use China COSCO as a platform to tap into capital markets. Meanwhile, China COSCO will have a priority to acquire COSCO Logistics back from COSCO Group when overall conditions are favorable.” – Chris Dupin
COSCO sells logistics unit to sister company
