Cosco Shipping Tanker (Dalian), previously sanctioned by the US between September and January for transporting Iranian oil, has launched sales of CNY 402m ($56.8m) worth of assets to a group affiliate.
The wholly owned subsidiary of Shanghai- and Hong Kong-listed Cosco Shipping Energy Transportation (CSET) will sell its 70% stake in Shenzhen Cosco Lpg Shipping, 57.5% in Haven Automation, and 15% in DA-IN Ferry for a total of CNY 88.8m, according to an exchange filing.
Cosco Dalian will also dispose of unspecified assets for CNY 221m and a supply arm for CNY 92.7m.
All these assets will be sold to Cosco Shipping Investment Dalian, which is directly controlled by state conglomerate China Cosco Shipping, the parent of CSET.
In June 2019, the investment company already acquired Cosco Shipping Tanker (Dalian) Seaman & Ship Management from Cosco Dalian. The shipmanager was also sanctioned by the US for Iranian trade.
The proposed sales have been approved by the CSET board and further announcements will be made, according to the filing.
Having taken a financial hit from US sanctions, CSET has embarked intra-group restructuring in recent weeks.
In early June, the company announced it would absorb its wholly owned subsidiary Cosco Shipping Tanker (Shanghai), which owned 49 oil tankers totalling 4.73m dwt as of the end of 2019.
The sales of Cosco Dalian’s assets are expected to pave the way for CSET to take over the subsidiary’s vessels and further streamline its tanker operations.
The US sanctions had taken Cosco Dalian's fleet of 42 tankers, including 26 VLCCs, out of international trading between 25 September and 31 January.
On a group level, CSET posted net profits of CNY 432m on revenue of CNY 12.3bn in 2019.
This was despite Cosco Dalian recorded full-year net losses of CNY 606m on revenues of CNY 3.71bn last year.
Calculations based on company reports suggested CSET suffered net losses of CNY 151m in the fourth quarter.
CSET had also booked a provision of CNY 10m ($1.41m) for charter compensations related to US sanctions.
“Some clients that had sealed shipping contracts with us may have had to find other ships and faced charter losses,” CSET said in its annual report.
