Cosco Shipping Holdings is seeking a buyer for shares in Hong Kong-listed Orient Overseas (International) Ltd to fund expansion.

OOIL, the parent of Orient Overseas Container Line (OOCL), said Cosco subsidiary Faulkner Global Holdings has brought in US investment bank JP Morgan to find a buyer for stock worth HKD 923.72m ($120m).

This represents 1.82% of the existing OOIL share capital.

The sale involves 11.4m shares to new institutional investors.

Faulkner's stake will be cut from 75% to 73.66%.

JP Morgan will itself buy the stock should it fail to find a buyer.

The cash will go towards funding newbuildings, buying containers or for other possible investment in the future.

More investors wanted

"The company will closely monitor the business of the group and the market conditions for any such investment opportunities," OOIL said.

The board views the move as a good opportunity to finance future development and expansion, the company added.

"This transaction is a clear statement of the faith of Cosco Shipping Holdings and OOIL in the enduring strong value of the dual-brand strategy," OOIL said.

OOIL added that the idea also is to increase the liquidity of the share, and attract "more and more" potential shareholders.

The price of HKD 81.80 per share represents a discount of 18.20% to the closing price of HKD 100 on Friday last week.

Earlier in January, OOCL said it carried 23.7% more boxes in the fourth quarter of 2020, compared to the same period in 2019.

Revenue soared 51% to $2.42bn in the three months ending 31 December, as freight rates hit record levels.

The loadable capacity of the fleet increased by 17.5%, with the overall load factor rising 4.6% compared with 2019.

The average revenue per teu was up 22.2% over the same period.

OOIL has annual revenue of more than $6.9bn.