Cosco Shipping Intl (Singapore) proposes sale of 60 percent stake in Cosco Shipping (Singapore)

Singapore container portSingapore’s container port

Cosco Shipping International (Singapore) has proposed selling its 60 percent stake in Cosco Shipping (Singapore) for US$42.39 million to Cosco (H.K.) Shipping, with an extraordinary general meeting (EGM) planned later this month to seek shareholder approval for the deal, according to a filing to SGX Wednesday.

“The proposed transaction represents the company’s strategic decision to streamline its conglomerate structure to increase focus on the company’s core logistics business, the largest business segment of the group, and to achieve better performance for the group’s other existing businesses, including the shipping business currently carried out through the sale company,” Cosco Shipping International (Singapore) said in the filing.

“The group’s logistics business owns one of Singapore’s largest one-stop integrated logistics hub and its main businesses comprise warehousing, container depot, automotive logistics, transportation and property management in Singapore. The group has logistics operations in Singapore, Malaysia, Indonesia and Vietnam,” the filing said.

The proceeds will be used to expand the logistics business in South and Southeast Asia and/or for working capital, the company said.

Cosco Shipping (Singapore) owns three Supramax vessels with an average age of 16 years, the filing said, noting this constrained its ability to compete effectively.

Cosco Shipping Bulk plans to use the sale company to establish a base office in Singapore, with the sale company able to leverage on Cosco Shipping Bulk’s network, the filing said.

China Cosco Shipping Corp. the indirect controlling shareholder of Cosco Shipping International (Singapore), is also the indirect controlling shareholder of Cosco (H.K.) Shipping, the filing said. Cosco (H.K.) Shipping is wholly owned by Cosco Shipping Bulk, which is in turn a wholly owned subsidiary of China Cosco Shipping Corp., the filing said.

The EGM is scheduled for 23 December, the filing said.