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2006 November 24   05:30

HK Orient Overseas shares surge on US$2.35 bln terminal sale

Shares in Orient Overseas (International) Ltd. (OOIL) were set to open up 21.79 percent on Friday after the shipping firm said it sold four North American terminals to a Canadian pension fund for US$2.35 billion and might make a special dividend after the deal.

The selling price was much higher than analyst forecasts of between US$1.1 billion and US$1.3 billion.

"For sure the book value (of the assets) should be extremely low, so they realised a huge profit," said Andrew To, sales director at Tai Fook Securities.

"They company will pay a huge special dividend and the share price will go up at least 5 percent," he said.

OOIL said in a statement it would review the potential uses of the proceeds from the sale and may use the money to expand its core business and to make a special dividend and share buyback.

Shares of OOIL were set to open at HK$45.0, up HK$8.05, as trading resumed on Friday morning after being suspended from Wednesday, pending the statement on the asset sale.The stock had gained more than 33 percent since July 25, when the company first declared its intention to sell the four ports, to its close on Tuesday, topping a 17 percent rise in the blue-chip Hang Seng Index in the same period. (US$1=HK$7.8)

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