Yingkou Port acquires parent's seven berths in asset-share swap
Yingkou Port, a Shanghai-listed port operator in Liaoning province, will acquire 5.8 billion yuan worth of port assets from its parent company by issuing 443 million new shares, as it seeks to increase berth efficiency and avoid connected transactions.
The company said it would offer the shares at 13.10 yuan each, based on the average price for the 20 trading days before trade in the shares was suspended.
Seven berths, of which two cater for iron ore shipments and the others for general cargo, oil and containers, will be injected into the listed company.
Some of the berths were underused when operated by the parent for the sake of avoiding competition.
As of March 31, the seven berths were valued at 5.98 billion yuan. Yingkou said that as the transaction was expected to be completed by December 31, the assets' valuation would fall to 5.8 billion yuan, taking into account depreciation over nine months.
The company said connected transactions could be trimmed and the underused berths upgraded and operated to a level equivalent to their designed capacities.
One berth for iron-ore with an annual capacity of 200,000 tonnes came on stream in October last year and was leased to Yingkou from January at six million yuan a year.
The other iron ore berth, which came on stream in 2004 with a similar designed capacity, has been leased to Yingkou since 2005 at an annual rent that almost doubled to 80 million yuan this year from 48 million last year and 41.2 million in the first year.
A coal berth that has been in operation since October 1986 handles more than a million tonnes of coal each year against its capacity of five million tonnes.
Yingkou said the berth was no longer subject to non-competition factors and that it would fully utilise its capacity through scientific allocation.
Another general cargo port with 200,000 tonnes of designed capacity has not been used commercially at all due to a non-competition agreement between the parent company and the listed unit.
Value of the seven berths to be injected into Yingkou Port as of March 31: 5.98b yuan