Kong Wah in $214m Shenzhen deal
KONG Wah Holdings has launched a 160 million yuan (about HK$214 million) joint-venture investment vehicle in Shenzhen as an aggressive diversification drive into property, container terminals, warehousing and reclamation works.
Shenzhen Harbour City Industrial Development Co is 70 per cent owned by Kong Wah and 30 per cent owned by Nanhai Oil Shenzhen Development and Service Corp.
Kong Wah chairman Lam Chung-kiu said Shenzhen Harbour City was a strategic investment vehicle to pursue various projects through direct investment or joint ventures.
He said the joint venture was negotiating with Nanhai Oil to undertake the development of three 35,000-tonne container terminals and a warehouse complex in Shenzhen.
The container terminals are expected to take six years to complete, and will involve a total investment of about 600 million yuan.
Mr Lam said the development of container terminals formed part of Kong Wah's diversifying from electronics manufacturing to various development opportunities.
He said it was negotiating to bring in Hongkong investors as partners in the development of container terminals, in which Kong Wah has little experience.
Asked about the possibility of Cheung Kong (Holdings) or Hutchison Whampoa as partners, he said: ''We have an intention to do so, but nothing has been finalised.'' Cheung Kong has an effective nine per cent stake in Kong Wah through a $180 million convertible redeemable note.
Mr Shao Botian, deputy party secretary of Nanhai Oil, said the proposed warehousing complex would be built on 400,000 square metres of reclaimed land.
He said Nanhai Oil had a number of projects being developed in its 23-square-kilometre Nanhai Development region, and Shenzhen Harbour City would be given priority to secure projects from it.
Shenzhen Harbour City is also seeking to participate in the restructuring of two electronics factories.
Nanhai Oil, established in 1984, is 35 per cent owned by the Shenzhen authorities, 32.5 per cent by China Everbright Holding, and 32.5 per cent by South China Sea Oil Joint Service Corp.
It has developed into a group with total assets of more than three billion yuan.