Stocks News
- COSCO plans to buy parent's bulk fleet
Date: 27-Jul-2007 Sources: (Shenzhen Daily)
CHINA COSCO Holdings Co. will sell shares again to buy its parent's US$10.5 billion bulk carrier business, sources close to the firm said Thursday, paving the way for the firm to rival A.P. Moeller-Maersk as the world's largest shipping conglomerate.
The news comes a month after COSCO, which owns the world's fifth-largest container fleet, sold US$2 billion of A shares in Shanghai to fund the acquisition of a logistics business and container ships.
Now, the firm intends to pick up its unlisted parent's fleet of dry bulk carriers, used to ferry goods such as iron ore, coal and grain.
'They plan to issue A shares to its parent and will make an announcement first. The asset buy will take place later,'a source familiar with the situation said.
Two other sources close to the firm said COSCO indeed intended to sell shares to pick up its parent firm's shipping arm. Company officials declined comment Thursday.
COSCO said in March it was in talks to buy ships from parent China Ocean Shipping (Group) Co. to expand into the bulk carrier business, hoping to ride demand for raw materials to power the world's fourth-largest economy.
Industry executives and analysts say the global shipping market should remain resilient this year, propped up in part by China's voracious appetite.
'The parent is expected to sell the asset at a discount to the listed firm, so that should enhance earnings and value of the company,'said Karen Chan, an analyst with Credit Suisse.
COSCO group owned 407 bulk carriers with a total capacity of 31 million deadweight tons, the listed firm said in March.
Sponsor Results:
