Zhonggu Logisitcs plans US$214m IPO on Shanghai bourse
CHINA's Zhonggu Logistics, an affiliate of the country's largest domestic liner operator Zhonggu Shipping Group, plans to raise CNY1
CHINA's Zhonggu Logistics, an affiliate of the country's largest domestic liner operator Zhonggu Shipping Group, plans to raise CNY1.5 billion (US$214 million) through an IPO of its shares on the Shanghai Stock Exchange.
The China Securities Regulatory Commission approved Zhonggu Logistics' IPO application on July 23, 2020 and the Chinese investment bank China International Capital Corporation is underwriting the share issuance.
Previously listed on Chinese over-the-counter bourse National Equities Exchange and Quotations, Zhonggu Logistics voluntarily delisted itself from this bourse and announced its IPO plans in May 2019. The date for the IPO has not been disclosed.
According to Zhonggu Logistics' listing prospectus, CNY1.35 billion of the money raised in the IPO will help fund containers and CNY153 million will help to finance vessel acquisitions. In total Zhonggu Logistics plans to spend CNY2.4 billion (part funded by the IPO proceeds) on acquiring ships and containers. Expenditure for containers is estimated at CNY1.38 billion and total spending on ship acquisitions is estimated at CNY1.02 billion, according to Container News, Jacksonville.
Zhonggu Logistics, which offers services in freight forwarding, multimodal transportation and cold chain transportation, will issue 81.9 million shares that represent not more than 10 per cent of its total stocks, leaving majority control with Zhonggu Group chairman Lu Zongjun.
Mr Lu owns 499 million shares in Zhonggu Logistics through entities he controls, such as Zhonggu Group, Guyang Investment, and Guze Investment, amounting to 83.13 per cent interest in Zhonggu Logistics. Zhonggu Group alone holds 70.15 per cent of Zhonggu Logistics' shares.
In 2019, Zhonggu Logistics recorded revenue of CNY9.9 billion and net profit of CNY858 million, equating to year-on-year growth of 23 per cent and 56 per cent, respectively. As at December 31, 2019, the company had total assets of CNY8.31 billion and total liabilities of CNY5.34 billion.