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Annette Chiu

State-owned warehouse operator China Chengtong Holdings will gain a Hong Kong presence by becoming the controlling shareholder of China Logistics.

China Chengtong has acquired 36 per cent - or about 608 million shares - of the financially troubled mainboard-listed company for HK$54 million, with its executives taking over management.

It is also providing China Logistics with an unconditional loan of HK$15 million on a one-year term.

'Acquiring China Logistics can help us to be more internationalised. The listed company serves as a window to Hong Kong and the world,' said Ma Zhengwu, chairman of both China Chengtong and China Logistics, yesterday.

Major businesses of China Chengtong include warehouse management, transportation and delivery services, supply chain management and integrated logistic services.

Its net asset value was six billion yuan (about HK$5.63 billion) in 2001, while turnover reached 10.8 billion yuan.

The state-owned enterprise has storage space of more than 13 million square metres, including 63 centres in more than 20 cities.

China Logistics made a net loss of HK$17 million in the six months to September 30 last year, compared with a loss of HK$1.1 billion in the same period for 2001.

Li Tiefeng, the new managing director, said the principal task for China Logistics was to dispose of its loss-making operations, including some mainland property developments.

However, he did not give a time line on when the company could break-even.

'The company is undergoing a restructuring process. It will focus in three business areas including logistics, trading and distribution and strategic investment,' Mr Li said.

'It will also streamline its existing businesses and dispose of its non-core operations which are not profitable, including properties in the mainland.'

TERRITORIAL GAIN

China Chengtong acquires 36 per cent of financially troubled mainboard-listed China Logistics for HK$54 million

It is also providing China Logistics with an unconditional loan of HK$15 million on a one-year term



China Chengtong's acquisition secures foothold in Hong Kong