COSCO SHIPPING Ports announces disposal of interest in various port assets and possible disposal of Taicang Terminal and Jiangsu Petrochemical Terminal
COSCO SHIPPING Ports Limited, a leading ports operator in the world, announced on 18 Sep-tember 2019, the Company (as seller) entered into the Longtan Share Purchase Agreement, Yuanyang Share Purchase Agreement and Zhangjiagang Share Purchase Agreement with SIPG (HK) (as purchaser), in relation to the sale and purchase of the Company’s indirect interests in Nanjing Longtan Terminal (via Longtan SPV), Yangzhou Yuanyang Terminal (via Yuanyang SPV and Zhang-jiagang SPV) and Zhangjiagang Terminal (via Zhangjiagang SPV), respectively.
It is estimated that the Company would get around RMB 2.32 billion, including aggregated consideration under the Share Purchase Agreements of approximately RMB10.6 billion (equivalent to approximately HK$11.8 bil-lion). As at 31 August 2019 and an outstanding amount of approximately RMB 1.26 billion of paya-bles owing to the Company and its associates.
The disposal of interest in various port assets is our response to industrial development and changes in the region. The profit and throughput contribution from Nanjing Longtan Terminal, Yangzhou Yuanyang Terminal and Zhangjiagang Terminal is com-paratively small. The Company will continue to optimize the terminal portfolio in Yangtze Delta, strengthen the development of Nantong Tonghai Terminal and CSP Wuhan Terminal and continue to develop hub port in the Yangtze Delta region.
After completion of the Share Purchase Agreements, the Company will cease to own any interest in any of the Target Companies, Nanjing Longtan Terminal, Yangzhou Yuanyang Terminal and Zhang-jiagang Terminal. Each of Longtan SPV, Yuanyang SPV, Zhangjiagang SPV, Yangzhou Yuanyang Termi-nal and Zhangjiagang Terminal will cease to be a subsidiary of the Company following the Transactions and Nanjing Longtan Terminal will cease to be an associate of the Company.
Pursuant to the Longtan Share Purchase Agreement, the Company agreed to sell and the Purchaser agreed to purchase the Longtan Sale Shares, representing 100% of the total issued share capital of Longtan SPV. The consideration for the sale and purchase of the Longtan Sale Shares pursuant to the Longtan Share Purchase Agreement is approximately RMB367,306,000 (equivalent to approximately HK$406,607,000).
As at 31 August 2019, Longtan SPV and Nanjing Longtan Terminal together have an outstanding amount of approximately US$27,000,000 (equivalent to approximately HK$214,000,000) of payables owing to the Company and its associates. 2 Pursuant to the Yuanyang Share Purchase Agreement, the Company agreed to sell and the Purchaser agreed to purchase the Yuanyang Sale Shares, representing 100% of the total issued share capital of Yuanyang SPV.
The consideration for the sale and purchase of the Yuanyang Sale Shares pursuant to the Yuanyang Share Purchase Agreement is approximately RMB316,039,000 (equivalent to approx-imately HK$349,855,000). As at 31 August 2019, COSCO SHIPPING Ports Investments (Shanghai) Co. Ltd. and COSCO SHIPPING Ports Development Co., Limited, both being wholly-owned subsidiaries of the Company, and COSCO SHIPPING Finance Co., Ltd., being a subsidiary of COSCO SHIPPING, have provided Yangzhou Yuanyang Terminal the Yuanyang Loan with a total outstanding amount of RMB835,5 00,000 (equivalent to approximately HK$925,000,000).
In addition, Yuanyang SPV and Yangzhou Yuanyang Terminal together have an outstanding amount of approximately US$26,000,000 (equivalent to approximately HK$201,000,000) of payables owing to the Company and its associates as at 31 August 2019.Pursuant to the Zhangjiagang Share Purchase Agreement, the Company agreed to sell and the Pur-chaser agreed to purchase the Zhangjiagang Sale Shares, representing 100% of the total issued share capital of Zhangjiagang SPV. The consideration for the sale and purchase of the Zhangjiagang Sale Shares pursuant to the Zhangjiagang Share Purchase Agreement is approximately RMB380,774,000 (equivalent to approximately HK$421,517,000).
As at 31 August 2019, Zhangjiagang SPV and Zhang-jiagang Terminal together have an outstanding amount of approximately US$7,000,000 (equivalent to approximately HK$56,000,000) of payables owing to the Company or its associates.In addition, the Board would like to further announce that the Company also intends to dispose all of the Company’s indirect interests in Taicang Terminal and Jiangsu Petrochemical Terminal. As at 18September, no agreement has been entered into by the Group in relation to such disposals.
About COSCO SHIPPING Ports
COSCO SHIPPING Ports Limited is a leading ports operator in the world; its terminal portfolio covers the five main port regions in Mainland China, Southeast Asia, Middle East, Europe, South America and the Mediterranean Sea. As at 30 June 2019, CSP operated and managed 288 berths at 37 ports worldwide, of which 197 were for containers, with a combined annual handling capacity of 110 million TEU. The controlling shareholder of COSCO SHIPPING Ports is COSCO SHIPPING Holdings Co., Ltd. and its ultimate parent company, China COSCO Shipping Corporation Limited is the largest integrated shipping enterprise in the world.