01 April 2014

[0101414.EN.SEA] Sinotrans Shipping Buys 2 Firms For US$138 Million, But Profit Down

HONG KONG-listed company and Sinotrans Shipping, member of state-owned Sinotrans and CSC Group, has received a number of shipping assets belonging to its parent and sister company, Sinotrans Ltd.

Spending a total of US$138 million that includes the assumption of $48 million in debt, Sinotrans Shipping has acquired from its parent a 49 per cent stake in Sinochart, a dry bulk chartering business with 90 chartered-in dry bulk ships.

It also acquired all of Sinotrans Tianze, a shipmanagement and conveying business with two breakbulk cargo ships.

The company further announced acquisitions of a 49 per cent stake in Sinotrans Container Shipping, a struggling intra-Asia container shipping line with 32 ships, and of four 1,100-TEU vessels from sister company Sinotrans Ltd, reported Lloyd's List.

The asset purchases support the plan to restructure shipping assets within Sinotrans and CSC Group, which also owns struggling CSC Phoenix and Nanjing Tankers.

The 49 per cent stake in Sinochart was valued at $70 million. The two Sinotrans Tianze vessels, 22,000 dwt Skyglory and Skyroyal, carried a price tag of $39 million.

The 49 per cent stake in Sinotrans Container Shipping was valued at $4 million. The four 1,100 TEU containerships were valued at total of $24 million.

"As a result of the assets injection, [Sinotrans Shipping] can further expand the fleet scale of the shipping industry of the company, strengthen the national shipping network and enrich and optimise the ship model," Sinotrans Shipping said in a stock exchange filing.

"It is the most advantageous time for the company to enlarge its scale at a low cost," the company said.

It said the shipping market could revive "in a volatile pattern" and that the purchase of competitive assets now would help it to seize the advantage as the market expands.

Sinotrans Shipping's 2013 net profit was down 79 per cent to $4.3 million from a year ago, due to lower revenue and finance income.

Source : HKSG.

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