Chinese port operator Jinzhou Port Co., Ltd. today announced that it had gained approval from its board to issue 246 million shares in a private placement.
All the shares will be acquired by its domestic peer Dalian Port Co., Ltd. for CNY 7.77 apiece in cash. The proceeds Jinzhou Port raises from the private placement will be about CNY 1.911 billion and will be mainly used to fuel its four projects, pay back bank debts and complement capital.
Orient Group Incorporation Co., Ltd. currently serves as the largest shareholder of Jinzhou Port. It has 256.815 million Jinzhou Port shares, accounting for about 24.33 percent of the latter's capital stock. After the private placement, the group's stake in Jinzhou Port will be diluted to 19.73 percent. Dalian Port will take the place the Jinzhou Port Bureau as the second largest shareholder of Jinzhou Port, in which it will have an 18.9 percent stake.
Dalian Port, the operator of China's largest crude oil terminal, planned to take a 15.85 percent stake in Jinzhou Port from the Jinzhou Port Bureau in August 2006. However, the plan was laid on the table for various reasons later. To acquire Jinzhou Port is a strategic move for Dalian Port to consolidate the port resources of Liaoning Province, said industry experts.
The Jinzhou port is expected to grow into a port with an annual handling capacity of over 100 million tons in the future, especially after the completion of the Chifeng-Jinzhou railway.
Liaoning, situated in the south of northeast China, currently has five ports, including the Ports of Dalian, Yingkou, Jinzhou, Panjin, and Dandong. These ports are expected to suffer peer competition as all of them are situated at the bank of the nation's Bohai Bay.
The Panjin port and Dandong port are small. However, it is impossible for local governments to sell the Yingkou port as it plays a significant role in boosting local economy. Therefore, the likely target acquired by Dalian Port is the Jinzhou port, pointed out industry experts.
Dalian Port gained approval to issue CNY 3 billion corporate bonds on April 23, 2008. It was the first time for the company to raise money on the domestic capital market since its establishment in November 2005. The proceeds will be mainly used in the five ports' expansion.
All the shares will be acquired by its domestic peer Dalian Port Co., Ltd. for CNY 7.77 apiece in cash. The proceeds Jinzhou Port raises from the private placement will be about CNY 1.911 billion and will be mainly used to fuel its four projects, pay back bank debts and complement capital.
Orient Group Incorporation Co., Ltd. currently serves as the largest shareholder of Jinzhou Port. It has 256.815 million Jinzhou Port shares, accounting for about 24.33 percent of the latter's capital stock. After the private placement, the group's stake in Jinzhou Port will be diluted to 19.73 percent. Dalian Port will take the place the Jinzhou Port Bureau as the second largest shareholder of Jinzhou Port, in which it will have an 18.9 percent stake.
Dalian Port, the operator of China's largest crude oil terminal, planned to take a 15.85 percent stake in Jinzhou Port from the Jinzhou Port Bureau in August 2006. However, the plan was laid on the table for various reasons later. To acquire Jinzhou Port is a strategic move for Dalian Port to consolidate the port resources of Liaoning Province, said industry experts.
The Jinzhou port is expected to grow into a port with an annual handling capacity of over 100 million tons in the future, especially after the completion of the Chifeng-Jinzhou railway.
Liaoning, situated in the south of northeast China, currently has five ports, including the Ports of Dalian, Yingkou, Jinzhou, Panjin, and Dandong. These ports are expected to suffer peer competition as all of them are situated at the bank of the nation's Bohai Bay.
The Panjin port and Dandong port are small. However, it is impossible for local governments to sell the Yingkou port as it plays a significant role in boosting local economy. Therefore, the likely target acquired by Dalian Port is the Jinzhou port, pointed out industry experts.
Dalian Port gained approval to issue CNY 3 billion corporate bonds on April 23, 2008. It was the first time for the company to raise money on the domestic capital market since its establishment in November 2005. The proceeds will be mainly used in the five ports' expansion.