The financing arm of Chinese state giant China Cosco Shipping is planning to raise up to CNY 4.8bn ($733m) via stake sales in one of its main leasing arms.
The fund raising comes as the Shanghai and Hong Kong-listed financier continues to acquire vessels to lease to group affiliates and others.
Cosco Shipping Development agreed to sell 35.2% in wholly owned subsidiary Cosco Shipping Leasing to a Chinese fund, led by China Chengtong, a major logistics company owned by the central government.
The CNY 1.8bn cash proceeds from the sale will be used to acquire vessels or containers to expand shipping and “industry-related” leasing businesses, Cosco Development said in an exchange filing.
Cosco Leasing provides lease financing to the transport, medical, energy, construction, education, industrial equipment and other sectors.
The outfit owns 30 vessels, including 12 bulkers totalling 547,000 dwt and 12 tankers with 674,100 dwt, VesselsValue data shows.
New shares
Separately, Cosco Development said it plans to issue new shares of Cosco Leasing to a strategic investor to raise CNY 1.8bn to CNY 3bn.
“The proceeds to be raised from the potential capital increase are intended to be used for the replenishment of the capital of Cosco Leasing for its future business development,” Cosco Development said.
The shares will be offered on the Shanghai United Assets and Equity Exchange via a public tender, and the successful bidder will own nearly 37% of Cosco Leasing.
If the plan is to go ahead, the shareholdings of Cosco Development and the Chinese fund — known as Mixed Ownership Reform Fund — will be diluted.
Cosco Development expects to own 40.8% in Cosco Leasing following the transactions and remain its largest shareholder, according to the filing.
The stake sales are subject to the approval of an extraordinary general meeting scheduled on 28 December.
Major deals
Since the merger between Cosco Group and China Shipping in 2016 to create China Cosco Shipping, China’s largest shipping conglomerate, Cosco Development has emerged as the group’s shipowning arm while developing financing businesses for other sectors.
Earlier this quarter, Cosco Development agreed to bareboat charter 74 containerships to Cosco Shipping Lines for $4.62bn.
In November, the company acquired 16 bulkers under construction from Cosco Shipping Bulk for $327m.
The 210,000-dwt vessels, due for delivery from December to August, will be time chartered back to Cosco Bulk for 10 years at $15,993 to $16,936 per day. They are expected to carry bauxite from Guinea to China.
