Yangzijiang will work with China Ocean Industry Group and its wholly-owned Jiangxi Jiangzhou Union Shipbuilding (Jiangxi Shipbuilding), and investment holding firm Wuxi Tianshi Education Goods.
The parties will establish Mining Co to engage in mine construction, digging engineering, explosive works, rock excavation processing, cleansing, sales, freight, transportation, shipping, terminal loading and foreign investment.
The board of directors of Mining Co will comprise of seven members, with Yangzijiang appointing four members, China Ocean Industry Group appointing two and Wuxi Tianshi appointing one. The chairman of the board will be from Yangzijiang.
Thereafter, Mining Co will establish Shipbuilding Co to engage in the aspects of the shipbuilding business.
The agreement to form Shipbuilding Co also includes a plan to reorganise the assets of Jiangxi Shipbuilding.
After Mining Co and Shipbuilding Co are formed, China Ocean Industry Group will gradually migrate its shipbuilding business currently carried out by Jiangxi Shipbuilding to the new entities as part of the business reorganisation.
China Ocean Industry Group, previously named China Ocean Shipbuilding Industry Group, has been diversifying its business away from the ailing shipbuilding market since 2015, venturing into gas operations, LNG and even the car parking business.
The new Mining Co entity has also attracted investments from housing construction and investment holding firm Shenzhen Sufa and enterprise management firm Beijing Zhongrun.
Shenzhen Sufa has agreed to invest RMB50m to take up 10% shares of Mining Co, while Beijing Zhongrun has earmarked RMB25m for 5% shares. Beijing Zhongrun will also provide loan to China Ocean Industry Group for investments in infrastructure such as logistics corridors, terminals of Mining Co and general working capital.