July 20, 2004
SembCorp Marine takes stake in Chinese repair giant
Singapore's SembCorp Marine has signed an agreement with China Ocean Shipping Co. (COSCO) to acquire a 30 percent equity stake in the enlarged capital of COSCO Shipyard Group Co. Ltd (CSG).
COSCO Shipyard Group is a leading ship repair and conversion group in China. It owns five major shipyards that are strategically located in the key coastal cities stretching from Dalian in the north, Nantong, Shanghai and Zhoushan in the center, to Guangzhou in the south. These shipyards provide shipowners with an effective network of marine engineering services across the entire length of China's coast. Three of the yards, Dalian, Nantong and Guangzhou are already among China's top ten largest ship repair yards.
SembCorp Marine's net consideration for the 30 per cent equity stake in COSCO Shipyard Group is RMB 240 million (S$49) million based on the revalued Net Asset Value of the CSG and the share transfer of its 20 per cent equity stake in COSCO alian Shipyard to the enlarged COSCO Shipyard Group. This brings SembCorp Marine's total investment value in CSG to RMB 340 million (S$70 million--or about US$41 million).
Final shareholdings of COSCO Shipyard Group are as follows:
China Ocean Shipping Co (Cosco) 49.52
SembCorp Marine Ltd 30.00
Shanghai Ocean Shipping Co 8.23
Guangzhou Ocean Shipping Co 8.53
Tianjin Ocean Shipping Co 3.72
The additional investment of S$49 million will be funded from SembCorp Marine's own internal resources