China Ocean Shipbuilding in joint venture with 2 Ningbo firms
China Ocean Shipbuilding Industry has entered into a 508 million yuan (HK$638 million) joint venture with two Chinese state-linked companies in Zhoushan, part of the port of Ningbo in Zhejiang province, the Hong Kong-listed firm announced yesterday.
The joint venture, Zhoushan China Ocean Investment Fund, will invest in and provide management consultancy services for the shipbuilding and ocean engineering sectors.
The other two partners are Zhoushan Marine Comprehensive Development and Investment, owned by the Zhoushan government, and Zhoushan Zhouyi Investment Management Partnership Enterprise, which is 34 per cent owned by Zhoushan Marine.
China Ocean Shipbuilding will contribute 400 million yuan, representing 78.7 per cent of the joint venture's funding. Zhoushan Marine will contribute 100 million yuan, while Zhoushan Zhouyi will contribute 8 million yuan.
The joint venture awaits the approval of the local government.
China Ocean Shipbuilding will finance its investment in the venture from the proceeds of an earlier issue of convertible bonds. The firm raised HK$985 million with the intention of buying or building shipyards on the mainland and to upgrade its existing production facilities.
The shipbuilder said: "The shipbuilding and the ocean engineering industry in Zhoushan holds potential, given that the Chinese government has started to adopt favourable policies to promote mergers, reorganisation and transformation of the shipbuilding industry."
The company cited the convenient location of Zhoushan, with its proximity to Shanghai, saying support facilities in ocean engineering, shipbuilding and related industries will follow.
It also said there are signs of a recovery in shipbuilding.