Yangzijiang proposes spinning off investment business into SGX listing

Singapore one-dollar bill, showing Chinese junk boatsSingapore one-dollar bill, showing Chinese junk boats

Correction: An earlier version of this article incorrectly spelled the company’s name in the headline. 

Yangzijiang Shipbuilding (Holdings) is exploring spinning off its investment segment by transferring the existing investments into a newly incorporated company for a proposed listing on SGX within six to 12 months, the Chinese shipbuilder said in a filing to SGX Monday.

“Building on the significant momentum from the shipbuilding segment’s strengthened financial position, operating performance and order book, the group intends to pursue the proposed spinoff and listing so as to focus on building the world’s leading ESG shipbuilding company,” Yangzijiang said. “As two independently run companies, the businesses will be better positioned to deliver long-term growth and create value for customers and investors.”

Yangzijiang noted that as of 1 November, it has order wins of 124 vessels valued at US$7.41 billion, its largest ever, and an outstanding order book of US$8.86 million across 165 vessels.

“As a result, the group believes it is in a strong position to execute this plan to form two well-capitalized, investment grade companies,” Yangzijiang said.

The spin-off group will focus on asset management and direct investments, the filing said, noting currently, its investment segment is mainly micro-financing, debt investments at amortised costs and other investments.

“It is intended for the spin-off group to realign its existing investment portfolios towards more growth-oriented investments, expanding global footprint and growing fee-income business, hence diversifying from the current single industry, country and asset portfolio,” Yangzijiang said. “The spin-off group will have greater capital resources and flexibility to form asset management capabilities.”

The two separated companies will benefit from sharpened operational focus, customized capital allocation to focus on distinct and industry-specific strategies, financial and strategic flexibility to pursue opportunities, and dedicated boards of directors with deep domain expertise, the filing said.

Yangzijiang noted the proposal is still at a preliminary stage and SGX hasn’t been formally consulted, adding there is no assurance of whether or when a deal might happen.