Pacific Basin to buy stake in Nanjing port
Pacific Basin Shipping Ltd will buy a 45 per cent stake in a terminal in Nanjing, its first in China, because of the country's rising use of steel and other metals.
Nanjing Port Group will own the rest of the US$74 million venture, Hong Kong-based Pacific Basin said in a statement on Tuesday. The shipping line will pay for its stake with US$16 million of cash and use loans for the rest, said Ellen Chan at Hill & Knowlton Asia Ltd, the public relations company hired by Pacific Basin.
Pacific Basin's ships carried 59 per cent more steel and other dry-bulk cargos last year, as China's demand for raw materials helped rates double. The Nanjing venture follows one in the UAE, as the company invests in terminals to widen its revenue base.
'The port business will provide the company with the most cash flow in the future,' said Joslyn Ji, a Hong Kong-based analyst at Core Pacific Yamaichi International Ltd. 'It wants to diversify its business as the shipping industry is quite volatile.' The Nanjing terminal, set to open next month, will handle steel, scrap metals and other general cargos, Pacific Basin said.
The eastern China port is the highest point accessible to so-called handysize ships on the Yangtze River, it added. The company didn't provide details about the terminal's capacity.
Shares of Pacific Basin rose 6.5 per cent to HK$12.50 at 12.17pm yesterday here, after gaining as much as 8.4 per cent. The stock has more than doubled this year, compared with a 17 per cent increase in the city's benchmark Hang Seng Index.
Pacific Basin formed a venture with the government of Fujairah in the UAE to operate vessels and a wharf at the Middle East port last year. Global dry-bulk volumes will likely rise about 6 per cent annually in the three years ending 2009 as construction booms in India and China fuel demand for iron ore, Deutsche Bank AG analyst Joe Liew wrote in a July 17 report.
Nanjing Port Group will own the rest of the US$74 million venture, Hong Kong-based Pacific Basin said in a statement on Tuesday. The shipping line will pay for its stake with US$16 million of cash and use loans for the rest, said Ellen Chan at Hill & Knowlton Asia Ltd, the public relations company hired by Pacific Basin.
Pacific Basin's ships carried 59 per cent more steel and other dry-bulk cargos last year, as China's demand for raw materials helped rates double. The Nanjing venture follows one in the UAE, as the company invests in terminals to widen its revenue base.
'The port business will provide the company with the most cash flow in the future,' said Joslyn Ji, a Hong Kong-based analyst at Core Pacific Yamaichi International Ltd. 'It wants to diversify its business as the shipping industry is quite volatile.' The Nanjing terminal, set to open next month, will handle steel, scrap metals and other general cargos, Pacific Basin said.
The eastern China port is the highest point accessible to so-called handysize ships on the Yangtze River, it added. The company didn't provide details about the terminal's capacity.
Shares of Pacific Basin rose 6.5 per cent to HK$12.50 at 12.17pm yesterday here, after gaining as much as 8.4 per cent. The stock has more than doubled this year, compared with a 17 per cent increase in the city's benchmark Hang Seng Index.
Pacific Basin formed a venture with the government of Fujairah in the UAE to operate vessels and a wharf at the Middle East port last year. Global dry-bulk volumes will likely rise about 6 per cent annually in the three years ending 2009 as construction booms in India and China fuel demand for iron ore, Deutsche Bank AG analyst Joe Liew wrote in a July 17 report.