Singamas to sell half its box making business for US$600 million
HONG KONG-listed Singamas Container Holdings has entered into an agreement to sell five of its wholly-owned subsidiaries for up to CNY4 billion (US$595
HONG KONG-listed Singamas Container Holdings has entered into an agreement to sell five of its wholly-owned subsidiaries for up to CNY4 billion (US$595.9 million) in cash, effectively reducing its container production capacity by half, to focus more on its logistics services and manufacturing.
The group said the potential purchaser is looking to acquire Qidong Singamas Energy Equipment, Qingdao Pacific Container, Ningbo Pacific Container, Singamas Container Holdings (Shanghai) Limited, and Qidong Pacific Port for CNY3.5 billion to CNY4 billion.
With annual production capacity to be halved with the potential disposal, Singamas said the deal 'will constitute a very substantial disposal' of the company.
'The company believes that the potential disposal will be favourable to the transformation and upgrading of the group's traditional business, which includes shifting the group's business focus to logistics services and the manufacturing, R&D and sale of specialised containers, and that it will facilitate the implementation of the group's differentiated development strategy for the container industry,' Singamas stated.
Qidong Pacific Port is one of Singamas' 11 depots in China, while the remaining four subsidiaries are among its nine Chinese factories, reported Seatrade Maritime News, Colchester.
Qidong Singamas Energy Equipment has the largest production capacity amongst all the nine factories, with annual production capacity of 270,000 TEU of dry freight containers and 60,000 TEU stainless steel refrigerated containers.
Qingdao Pacific Container and Ningbo Pacific Container have annual production capacity of 120,000 TEU and 110,000 TEU, respectively.
While Singamas Container Holdings (Shanghai) Limited has the smallest annual production capacity at 10,000 TEU, it is the group's first dry freight container factory in China and also its only tank container factory.
The five factories that Singamas are keeping include Huizhou Pacific Container, Qingdao Pacific Container, Shanghai Baoshan Pacific Container, and Qidong Singamas Offshore Equipment.
Qidong Singamas Offshore Equipment has an annual production capacity of 5,000 units of offshore containers, while the rest of the four factories each have similar annual production capacity of 120,000 TEU.
The four factories to be disposed of are contributing a combined annual production capacity of 510,000 TEU to Singamas, while the remaining five factories have a combined annual production capacity of 480,000 TEU plus 5,000 units of offshore containers.