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COSIG diversifies into gas operations

COSIG diversifies into gas operations
China Ocean Shipbuilding Industry Group (COSIG) is planning a tie-up with a energy supply company in an attempt to diversify its business.

The shipbuilding group said in a stock market announcement that it had signed a letter of intent with and an independent third party, which is a company incorporated in Hong Kong and is principally engaging in investment in oil and natural gas, and supply of energy in particular city gas in China, "for cooperation to strengthen the cooperation in relation to the assets and shareholding integration between the parties thereto".

Terms include exploration of the possibility of merger by incorporation of units of the target company in COSIG, and the company may eventually acquire the entire stake in subsidiaries owned by the company with cash and the issuance of convertible bonds.

The cooperation include a possible takeover of a subsidiary of the Chinese gas company which is principally engaged in sale of refined oil, LPG, LNG and propene in Jiujiang area and Jiangxi province with the aim of investing further in and expanding of terminals and other infrastructures owned by the unit for the future cooperation in LNG related business.

"The board believes that the possible cooperation enables the company to leverage on the strengths and experience of the Gas Co in the energy business to complement the group’s strategic diversification into energy logistics business," COSIG said in explaining the rationale for the deal.