Cosco Shipping Leasing has proposed to borrow CNY 1bn ($149m) from Minmetals International Trust as the leasing unit of Shanghai and Hong Kong-listed Cosco Shipping Development (CSD) continues to replenish its liquidity.
Cosco Shipping Leasing will apply for a three-year trust loan from the subsidiary of China Minmetals Corp (CMC), with collateral provided by CSD.
“This is for the leasing unit to develop its business and replenish working capital,” a filing said.
The announcement came after CSD in January unveiled a plan to sell a minority stake in Cosco Shipping Leasing via an open auction on the Shanghai United Assets and Equity Exchange in an attempt to raise cash and bring in new strategic investors.
Further details are yet to be announced.
The leasing unit is the beneficial owner of many shipping assets commercially operated by Cosco group firms.
As of the end of September, total assets of Cosco Shipping Leasing were valued at CNY 27.7bn and liabilities at CNY 23.1bn. Current liabilities reached CNY 12.6bn.
Over the past few years, Beijing has been promoting restructuring and cooperation among Chinese state-owned enterprises.
China Cosco Shipping, the parent of CSD, is born out of the merger between Cosco Group and China Shipping.
CMC, China’s largest ore miner, is created from the merger between China Minmetals and Metallurgical Corp of China.
In 2016, Cosco Shipping and CMC sealed a strategic cooperation agreement to enhance their collaboration in dry bulk, container, general cargo shipping and finance.
The two have also vowed to promote a free trade zone in Zeebrugge with the Belgian authorities and DEME as part of the Belt and Road Initiative.
