Cosco Shipping Energy Transportation (CSET) has finally completed its long-planned private placement in Shanghai.
The shipowner raised a total of CNY 5.1bn ($717m) from its parent China Cosco Shipping and two subsidiaries of China State Shipbuilding Corp (CSSC).
The Shanghai- and Hong Kong-listed tanker giant had been planning this issue since 2017 to fund 16 newbuildings but only received regulatory approval last December.
Late Wednesday, CSET said in an exchange filing that a total of 731m new shares were issued, having planned to sell up to 806m shares.
The shares were priced at CNY 6.98 each, compared with the closing price of CNY 7.60 on Wednesday. CSET traded down 4.74% to closed at CNY 7.24 per share on Thursday.
Accord to the filing, CSET invited 116 investors to bid for the shares but only three were willing to commit.
State-owned Cosco Shipping agreed to acquire 602m shares, raising its stakeholding in CSET from 38.1% to 44.9%.
Dalian Shipbuilding Industry Co (DSIC) bought 86m shares and now owns 1.8% of CSET. Hudong-Zhonghua Shipbuilding owns 0.9% after acquiring 43m shares.
DSIC and Hudong-Zhonghua, both of which controlled by state-run CSSC, did not hold any CSET shares previously.
The private placement’s lead underwriter was Guotai Junan Securities.
According to CSET, the money raised will be used to fund CSET’s newbuilding investments totalling $97.2m made earlier this decade. Those were for four VLCCs, three suezmaxes, three aframaxes, two LR2s and four panamaxes.
Of these, two 72,000-dwt panamax tankers were delivered in 2017.
In 2020 and 2021, DSIC will deliver the VLCCs and the suezmaxes, and Guangzhou Shipyard International – another CSSC yard – will deliver the aframaxes, the LR2s and two 65,000-dwt panamaxes.
“The tankers being funded are related to our core business and will allow us to increase revenue streams,” CSET said.
“Our combativeness will be improved and we will be bigger and stronger.”
