Cosco Corp holds a 50% stake in Cosco Shipyard Group and halted its shares from trading on Monday morning following an announcement last Friday by China Cosco Shipping on a restructuring of its shipyard business, which had been left out of the original merger of Cosco and China Shipping.
The new Cosco Shipping Heavy Industry has been carved out from the merged Cosco Shipping, combining the shipbuilding entities of Cosco Shipyard and Cosco Shipbuilding Industry Company, previously under China Cosco Group, and China Shipping Industry Co previously under China Shipping Group.
In a statement to the Singapore Exchange (SGX) Cosco Corp, its parent company had said: “The objective of the shipyard business restructuring is to centralise operations and management of the shipyard businesses of the China Cosco Shipping Corporation group, and will affect the company. There are various possibilities of carrying out the restructuring.
“At present, these various possibilities are still under consideration and, during this process, there will exist significant uncertainty which may affect the price of the company’s securities.”
It added that its parent had said it would it use its best efforts to notify Cosco Corp of the plans in roughly one month and as result had asked SGX to transform the trading halt to suspension from trading.
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