[EN-SEA] "OOIL" Sells Mainland Property to Focus On Container Shipping

HONG KONG's Orient Overseas (International) Limited (OOIL) has agreed to sell its Chinese property development arm, Orient Overseas Developments Limited (OODL) for US$2.2 billion to better focus on its container shipping business, reports The Wall Street Journal.

OOIL intends to use its US$1.06 billion gain from the sale to invest into its core business, container shipping, said the report.

The transaction provides a major cash boost for OOIL, with a significant war chest, which it could use to acquire cheap assets in the liner market, reports Paris-based Alphaliner News, also recalling that this is the second major disposal by the group after it disposed of its North American container terminal assets in 2006 for $2.35 billion.

With the property gone, the group's core business will be "Orient OverseasContainer Line" (OOCL) though the parent company will still retain its 7.9 per cent of Beijing as well as its Oriental Plaza, a commercial and office development and the Wall Street Plaza in New York, neither of which are part of the disposal.

Singapore's CapitaLand will buy the property. The purchase would give CapitaLand seven mixed-use property sites in Shanghai and Tianjin with a total gross floor area of 1.48 million square metres.

Orient Overseas reported a net loss for the six months ending June 30 of US$231.8 million, compared with a net profit of US$158.3 million a year earlier.

Source : HKSG, 20.01.10.