Chinese state-run shipping company Cosco Shipping Holdings has agreed to acquire a 5.8% interest in COFCO Fortune for CNY5.5bn ($814m), reported Reuters.
The purchase of this stake in the logistics and food processing arm of COFCO, a state agricultural conglomerate, forms part of the business’ strategy to boost capital.
Upon completion of the deal, the interest of COFCO and its other units in COFCO Fortune will be diluted from 89.7% to 69.8%, according to a Cosco stock exchange filing.
Cosco and COFCO Fortune plan to explore operations linked to warehouses, terminal ports and container yards.
The filing stated that Houke Fulin, a fund tied to private equity company Hopu Investments, also took part in the capital raising.
Multiple state-affiliated entities, such as the management council of China’s basic pension insurance fund and China Life Insurance’s asset management unit, also subscribed to the capital increase plan.
Last October, Cosco announced the acquisition of port assets from its parent entity for $2.7bn.
This included the purchased of a 3.2% stake in Guangzhou Port as well as a 14.9% holding in Shanghai International Port Group.
In the same month, COSCO SHIPPING Port secured the German Government’s approval to acquire a minority stake of below 25% in HHLA Container Terminal Tollerort (CTT) at the Port of Hamburg, which was less than the 35% stake initially agreed upon in September 2021.
Cosco will not gain exclusive rights to the terminal, which will have the city of Hamburg as its main shareholder.
