CSIHKC plans to spend HKD118.4m ($15.3m) to purchase 10m ordinary shares of CSHT Marine, representing the company’s entire issued share capital.
Cosco Shipping Financial and Hoi Tung will each be paid an equal amount of HKD59.2m from the sale.
“The directors consider that the acquisition is in line with the group’s strategic direction in developing the shipping services industrial cluster,” CSIHKC said.
“The acquisition will also be a horizontal integration of the group’s marine equipment and spare parts business segment, which on one hand significantly expands the size of business, and on the other hand facilitates synergy creation through economies of scale and cost reduction.”
Hoi Tung is principally engaged in trading and sales of marine equipment, port machinery, navigation equipment as well as parts and other ship material supply.
Cosco Shipping Financial and CSIHKC are both subsidiaries of China Cosco Shipping Corporation Limited (Cosco Shipping), hence the deal is a connected transaction of CSIHKC.
The share purchase agreement is expected to be confirmed in writing by all parties by 30 December 2016.
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