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Comec looks to sell off land and property subsidiary for $551m

Comec looks to sell off land and property subsidiary for $551m
CSSC Offshore & Marine Engineering (Group) Company (Comec) has proposed to dispose of its entire stake in GS Shipping for RMB3.53bn ($551.27m).

Comec, formerly known as Guangzhou Shipyard International (GSI) before its completed restructuring, has proposed to submit a tender notice to the Shanghai United Assets and Equity Exchange (SUAEE) after obtaining shareholders approval.

Comec, a core subsidiary of China State Shipbuilding Corporation (CSSC), said GS Shipping was established in late 2014 solely for the purpose to disposal of certain interests in land and properties. It has not engaged in any operation since its establishment.

The major assets of GS Shipping include a land parcel of approximately 393,793 sq m located in Guangzhou, China, with buildings erected on the land parcel.

The independent valuation of GS Shipping as at 30 November 2014 was RMB1.32bn while the book value of its total assets as at 30 June 2015 was around RMB1.21bn.

“The proposed disposal is conducive to optimising the group’s assets structure. The minimum considerations for the GS Shipping interest also represent a reasonable gain over the cost of the group’s investment,” Comec said.

The company also expects that the total income from the proposed disposal will amount to approximately RMB2.02bn after deducting tax and other expenses. The net proceeds will be used as working capital.

After Comec’s restructuring, its core subsidiaries included assets from its original entity GSI, and CSSC Haungpu Wenchong Shipbuilding, Guangzhou Shipyard International (Yangzhou) Company and Longxue Shipyard.