China COSCO aims for private issue of A shares
A month after floating shares on the Shanghai bourse, China COSCO (1919) said yesterday it is negotiating with parent China Ocean Shipping (Group) for a possible private issue of new A shares.
Asia's largest container-shipping liner did not disclose the purpose of the private share placement, but sources said the share sale is to finance the acquisition of the parent's bulk carrier fleet.
China COSCO said in a statement filed with the Hong Kong stock exchange that concrete details have "not been determined and need to be further discussed," with relevant mainland authorities.
In March, China COSCO confirmed that it was in talks with state-owned parent COSCO Group about the acquisition of the parent's bulk vessels business.
Merrill Lynch said it expects China COSCO to buy the fleet worth US$10.5 billion (HK$81.9 billion) at a discount of 20 percent or at US$8.4 billion in October. The fleet is made up of 407 bulk carriers.
Lehman Brothers estimates the asset injection will boost China COSCO's fair value by HK$4.60 a share. In a research note on Tuesday, it raised the target price for the stock from HK$9.60 to HK$13.70.
Analysts believe more assets, such as cargo carriers, oil tankers and specialized vessels, will be injected into the listed vehicle as China COSCO wants to further improve its attractiveness to investors.
Driven by speculation of asset injections from its parent, China COSCO's A shares have nearly tripled since its trading debut in Shanghai on June 26. As of December 31, China COSCO had a fleet of 139 vessels with a total capacity of 399,237 20-foot-equivalent units, ranking it fifth among the world's shipping companies by container fleet size, according to its A-share listing prospectus. Also, it operates 115 container berths globally with an annual throughput of 32.8 million containers.
COSCO Group owns and operates a merchant fleet comprising 715 vessels, including those of China COSCO, with a total carrying capacity of 42.19 million dead weight tonnes.
Of the 715 vessels, 407 are bulk carriers of 30.72 million DWT, 47 are tankers and 117 are general cargo ships and specialized vessels.
H shares and A shares of China COSCO were suspended yesterday and will resume trading today.
Asia's largest container-shipping liner did not disclose the purpose of the private share placement, but sources said the share sale is to finance the acquisition of the parent's bulk carrier fleet.
China COSCO said in a statement filed with the Hong Kong stock exchange that concrete details have "not been determined and need to be further discussed," with relevant mainland authorities.
In March, China COSCO confirmed that it was in talks with state-owned parent COSCO Group about the acquisition of the parent's bulk vessels business.
Merrill Lynch said it expects China COSCO to buy the fleet worth US$10.5 billion (HK$81.9 billion) at a discount of 20 percent or at US$8.4 billion in October. The fleet is made up of 407 bulk carriers.
Lehman Brothers estimates the asset injection will boost China COSCO's fair value by HK$4.60 a share. In a research note on Tuesday, it raised the target price for the stock from HK$9.60 to HK$13.70.
Analysts believe more assets, such as cargo carriers, oil tankers and specialized vessels, will be injected into the listed vehicle as China COSCO wants to further improve its attractiveness to investors.
Driven by speculation of asset injections from its parent, China COSCO's A shares have nearly tripled since its trading debut in Shanghai on June 26. As of December 31, China COSCO had a fleet of 139 vessels with a total capacity of 399,237 20-foot-equivalent units, ranking it fifth among the world's shipping companies by container fleet size, according to its A-share listing prospectus. Also, it operates 115 container berths globally with an annual throughput of 32.8 million containers.
COSCO Group owns and operates a merchant fleet comprising 715 vessels, including those of China COSCO, with a total carrying capacity of 42.19 million dead weight tonnes.
Of the 715 vessels, 407 are bulk carriers of 30.72 million DWT, 47 are tankers and 117 are general cargo ships and specialized vessels.
H shares and A shares of China COSCO were suspended yesterday and will resume trading today.