[030913.EN.SEA] China Cosco To Sell Property To Raise Capital To Avoid De-listing

TROUBLED Cosco group plans to sell CNY3.7 billion (US$605 million) of its property to reverse two and a half years of losses, which under Shanghai Stock Exchange rules, means de-listing if it posts a third consecutive annual loss.

"The board deems the transactions are expected to improve the profitability of the company, replenishing working capital, and lower the risk of a listing suspension," China Cosco told the Shanghai Exchange.

Cosco Container Lines and Cosco Bulk Carrier will each sell 81 per cent stakes involving two property companies back to parent China Ocean Shipping Group.

Cosco narrowed its first half year-on-year net loss 80 per cent to CNY990 million by selling Cosco Logistics as well as part ownership in Shenzhen's China International Marine Containers (CIMC).

Separately, Cosco group cut losses 11 per cent to CNY4.8 billion year on year mostly because of better performance from its dry bulk division, but this was offset by losses in its container segment (Coscon), which widened net loss 32 per cent to CNY2.2 billion, despite an 8.7 per cent rise in volume to 4.1 million TEU.

Container revenue dropped 11 per cent to US$740 per box year on year, attributed to a lack of network adjustment. "The group is dedicated to adjusting routes, expanding emerging markets and the China domestic market and reducing reliance on US and Europe main lanes," the filing said.

Coscon operates 187 vessels, aggregating to 838,089 TEU. Its owned capacity increased seven per cent and as 10 vessels on order totalling 97,100 TEU.

Source : HKSG.