Shanghai International Port Group Co., operator of the world’s second-busiest container harbor, will buy part of a new port in the city because of China’s rising exports. The company will buy the second section of Yangshan Port Phase 3 from Shanghai Tongsheng Investment Group, its third biggest shareholder, it said in a Shanghai stock exchange statement today. The port operator will sell 3.7 billion yuan ($540 million) of one-year bonds to help fund the deal, it added without giving a total price for the acquisition.
Shanghai is set to overtake Singapore as the world’s busiest container port as early as this year because of China’s rising exports of toys, textiles and computers to the U.S. and Europe. Still, nationwide traffic growth may slow to 12 percent this year from 20 percent last year because of the global recession, according to Shanghai Shipping Exchange.
The Phase 3 section will likely generate net income of 43 million yuan in the coming two years, said Shanghai Port, which already has ventures in the first two phases. The section will likely handle 1.15 million containers next year and 1.3 million in 2010, the company added. The acquisition is pending shareholder approval.
Shanghai Tongsheng owns 17 percent of the company. The port operator sold 4 billion yuan of one-year bonds in July.
Shanghai Port closed little changed at 3.90 yuan in trading in the city today ahead of the announcement. The company is down 57 percent this year amid a wider stock sell-off and concerns about slowing growth.
The city’s container throughput rose 8.7 percent in the first 10 months, according to the municipal statistics bureau. That compares with a 20.5 percent increase for the whole of last year, when the port handled 23.9 million containers.
Shanghai is set to overtake Singapore as the world’s busiest container port as early as this year because of China’s rising exports of toys, textiles and computers to the U.S. and Europe. Still, nationwide traffic growth may slow to 12 percent this year from 20 percent last year because of the global recession, according to Shanghai Shipping Exchange.
The Phase 3 section will likely generate net income of 43 million yuan in the coming two years, said Shanghai Port, which already has ventures in the first two phases. The section will likely handle 1.15 million containers next year and 1.3 million in 2010, the company added. The acquisition is pending shareholder approval.
Shanghai Tongsheng owns 17 percent of the company. The port operator sold 4 billion yuan of one-year bonds in July.
Shanghai Port closed little changed at 3.90 yuan in trading in the city today ahead of the announcement. The company is down 57 percent this year amid a wider stock sell-off and concerns about slowing growth.
The city’s container throughput rose 8.7 percent in the first 10 months, according to the municipal statistics bureau. That compares with a 20.5 percent increase for the whole of last year, when the port handled 23.9 million containers.