Cosco may buy bulk carriers
(Shanghai Daily)
Updated: 2007-07-27 08:50
Updated: 2007-07-27 08:50
China Cosco Holdings suspended trading on the Shanghai and Hong Kong stock exchanges yesterday.
Industry sources and news media speculated that the company will announce as early as today a share sale to help it buy its parent's dry-bulk shipping business.
The statement by the shipping company said trading was being suspended because "a possible significant transaction which is of a price-sensitive nature" was to be announced. Company officials would not confirm speculation about the transaction.
A Hong Kong-based industry insider who spoke to Shanghai Daily said China Cosco's purchase of bulk carriers from the state-owned China Ocean Shipping Group, its 51-percent shareholder, was "likely."
It was not clear if a share sale to fund the deal would be directed at the public, institutional investors or the parent company itself.
The suspension comes at a time when the firm's shares have been trading at record prices. In Shanghai, the closing price on Wednesday was 21.70 yuan (US$2.87), more than 2.5 times the issue price a month earlier. The Hong Kong shares have more than tripled over the past year to HK$12.72 (US$1.63) each.
If the deal goes through, China Cosco's parent company will have, in effect, sold 49 percent of its bulk shipping business to the minority shareholders of China Cosco, consisting of strategic investors and members of the shareholding public in Shanghai and Hong Kong.
"The industry is booming at the moment, and China Ocean Shipping knows it can fetch a good price now," a Shanghai-based equities analyst, told Shanghai Daily. "What we'll be seeing, then, is essentially a partial cashing out while the market is hot."
China Cosco's parent is one of the biggest shipping companies in the world.
Industry sources and news media speculated that the company will announce as early as today a share sale to help it buy its parent's dry-bulk shipping business.
The statement by the shipping company said trading was being suspended because "a possible significant transaction which is of a price-sensitive nature" was to be announced. Company officials would not confirm speculation about the transaction.
A Hong Kong-based industry insider who spoke to Shanghai Daily said China Cosco's purchase of bulk carriers from the state-owned China Ocean Shipping Group, its 51-percent shareholder, was "likely."
It was not clear if a share sale to fund the deal would be directed at the public, institutional investors or the parent company itself.
The suspension comes at a time when the firm's shares have been trading at record prices. In Shanghai, the closing price on Wednesday was 21.70 yuan (US$2.87), more than 2.5 times the issue price a month earlier. The Hong Kong shares have more than tripled over the past year to HK$12.72 (US$1.63) each.
If the deal goes through, China Cosco's parent company will have, in effect, sold 49 percent of its bulk shipping business to the minority shareholders of China Cosco, consisting of strategic investors and members of the shareholding public in Shanghai and Hong Kong.
"The industry is booming at the moment, and China Ocean Shipping knows it can fetch a good price now," a Shanghai-based equities analyst, told Shanghai Daily. "What we'll be seeing, then, is essentially a partial cashing out while the market is hot."
China Cosco's parent is one of the biggest shipping companies in the world.
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