COSCO SHIPPING Ports Limited (COSCO SHIPPING Ports) and Qingdao Port International Co., Ltd.(QPI) announced Friday that the Companies have entered into the Transaction Agreement, pursuant to which COSCO SHIPPING Ports will make strategic investment in QPI. Taking the proposed New H Share Issurance plan of QPI into consideration, the Subscription Shares will represent approximately 16.82% of the issued share capital of QPI, and COSCO SHIPPING Ports’ shareholding in QPI will increase to approximately 18.41% in total.
Shanghai China Shipping Terminal Development Co., Ltd. (SCSTD), a wholly-owned subsidiary of COSCO SHIPPING Ports, will subscribe for 1,015,520,000 non-circulating domestic shares in QPI at a total consideration of approximately RMB 5.8 billion (equivalent to RMB5.71 per share), of which approximately RMB 3.2 billion will be settled by the transfer of a 20% equity interest in Qingdao Qianwan Container Terminal Co., Ltd.(QQCT) to QPI and the remaining approximately RMB2.6 billion will be settled in cash.
COSCO SHIPPING Ports and QPI also announced to enter into the Strategic Cooperation Agreement on the same date, the parties expressed the intent of the following strategic co-operation in the future :
(i) further deepening co-operation towards developing the Port of Qingdao into an international shipping hub in Northeast Asia;
(ii) co-investing in overseas terminal projects (including the Khalifa Port Container Terminal II project in Abu Dhabi); and
(iii) setting up terminal project management company(ies) to co-operate in the businesses of management and operation of PRC and overseas terminal project(s) of COSCO SHIPPING Ports agreed by the parties.
For COSCO SHIPPING Ports, increasing the investment in QPI is a meaningful step in realising the company’s strategy of sharpening its competitive edge and creating greater value. The increased investment in, and the subsequent strategic co-operation with QPI will also strengthen the company’s leading position in the Greater China region, which is in line with the company’s strategy of enhancing control over terminal assets. Holding more shares in QPI, compared with directly holding shares in QQCT could increase the Company’s influence in the Port of Qingdao, allow the company to participate in the management of the whole port, and enjoy the development and sustainable growth of the entire port area.
For QPI, the strategic cooperation could enhance the Company’s competitive strength and accelerate the construction of the Port of Qingdao as the Northeast Asia international shipping hub; The issue of domestic shares and New H Share is an opportunity for QPI to raise funds for supporting the implementation of QPI’s internationalization strategy and business development, and boosting the rapid growth of international terminal and logistics business; The QQCT shares transfer will improve QPI’s financial performance; Through the strategic cooperation, QPI could establish capital ties, launch cooperation and achieve synergies with COSCO SHIPPING Ports and COSCO SHIPPING Group. The strategic cooperation enables QPI to better clutch the opportunities provided by the “Belt and Road” initiative, expand international terminal layout and terminal operations management output, consolidate QPI’s market leading position, and broaden future development space.
The transaction is an important measure for the both sides to achieve strategic cooperation. The both sides can establish strategic cooperative relationship, and achieve business cooperation, mutual benefit and win-win result.