China Ocean Shipping Company (COSCO) subsidiary COSCO Shipping Ports has signed an agreement with Shanghai International Port Group (SIPG) for the sale and purchase of its port assets.
In a regulatory disclosure to Hong Kong Stock Exchange (HKEX), Cosco Shipping Ports said that it will sell its indirect stakes in Nanjing Longtan Terminal, Yangzhou Yuanyang Terminal and Zhangjiagang Terminal in a transaction valued at around RMB1.06bn ($150m).
The company said: “Cosco Shipping Ports will cease to own any interest in any of the target companies, Nanjing Longtan Terminal, Yangzhou Yuanyang Terminal and Zhangjiagang Terminal.”
The proceeds obtained will be used to repay the loan. Cosco Shipping Ports intends to invest the proceeds on developing its shipping ports.
The transactions will have to receive various regulatory approvals.
The company announced its intention to cease all of its indirect interests in another two port assets, including Taicang Terminal and Jiangsu Petrochemical Terminal.
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However, Cosco Shipping Ports has not signed any agreements in relation to the two ports yet.
SIPG purchased a 20% equity stake in Cosco Group subsidiary Shanghai PanAsia Shipping for RMB854m ($127.5m) in March.
In January, Cosco Shipping Ports acquired a 4.34% stake in Beibu Gulf Port for around CNY470m ($68m) through its subsidiary China Shipping Terminal Development.
Last year, Cosco and SIPG partnered to acquire Hong Kong-based container-line Orient Overseas (OOIL).
SIPG manages all public terminals in the Port of Shanghai. In 2015, SIPG signed a contract to operate the port of Haifa’s new Bay Terminal in Israel for a period of 25 years, beginning 2021.