China Shipping Development is preparing for another round of asset injections after buying 19 oil tankers from its parent, China Shipping Group, last month. Chairman Li Kelin said the H share was holding preliminary talks about the next restructuring step at its parent, including further acquisitions and management of assets. Directors will seek shareholder approval at an annual meeting in June for a general mandate to issue new H and A shares representing 20 per cent of the capital of each. Mr Li said the mandate would pave the way for a share placement to fund potential asset injections. He said it would buy assets from its parent as well as outside firms, and potential assets would not be confined to the shipping business. Last month's purchase by China Shipping Development of 19 oil tankers from its parent for 1.4 billion yuan (about HK$1.3 billion) was funded partly by an H-share placement under a mandate approved last year. China Shipping Development's shares surged more than 10-fold last year on expectation of asset injections by China Shipping Group, the mainland's second largest shipping firm. On Wednesday, the company became the first H share to report net losses last yearof 74.58 million yuan and operating losses of 285.2 million yuan. The net figure was trimmed from the previous year, thanks to a bigger exceptional gain of 232.1 million yuan from selling four vessels with total tonnage of 80,000 dead-weight-tonnes. He said the operating losses came from domestic coal transportation because of a falling freight rate, with a 7.8 per cent decrease in revenues. The average freight for all business edged up 0.87 per cent last year. Mr Li said it would continue to sell inefficient and old vessels this year amid efforts to optimise the fleet. He said the company had seen 'significant' improvement in results in the first quarter, but refused to say whether it could turn around this year. The improvement was due to a restructuring of container transportation by forming a joint venture with the parent, expansion of oil tanker operations, which eliminated internal competition, and contribution from the newly acquired oil tankers. Mr Li said it would have lower interest costs this year after the central bank slashed interest rates last month. It would also continue cost-cutting efforts. Chief accountant Wang Daxiong said it had bank borrowings of 4.9 billion yuan at the end of last year and gearings had been lowered to 58 per cent from 60.5 per cent after repayment of some debts. He expected interest expenses to fall further this year, after saving 52 million yuan last year due to lower rates. Depreciation charges could rise along with the company's plan to buy more oil tankers. Last year, its depreciation outlays rose slightly to 647 million yuan, from 630 million yuan.