The minority shareholder is the second company this year to cut its losses Cosco Pacific is on the verge of becoming the second shareholder this year to quit the River Trade Terminal (RTT) as a steady stream of losses prompts another partner to call it a day. The HK$6.5 billion facility is thought to have lost more than HK$1 billion since its launch in 1998, weighed down by a HK$1.14 billion land premium, a faltering economy and bickering shareholders. According to a senior executive whose company owns a stake in the RTT, Cosco Pacific is 'very close' to finalising the sale of its 10 per cent stake to majority shareholders Hutchison Whampoa and Sun Hung Kai Properties. Neither majority firm would comment, but a spokesman for Cosco Pacific said the company had stated at its year-end results announcement last month it was looking to dispose of 'non-core assets'. Bank of China Group Investment sold its 10 per cent stake to Hutchison and SHKP in March. The deal comes as RTT management prepares for its day in court with the government next week. Failure to win the court case, over the RTT's right to increase its cash flow by servicing ocean-going vessels at its Tuen Mun facility, would further damage its financial position. RTT is known to have lost at least HK$250 million last year, the latest in a string of dismal results. In 1998, it lost HK$50 million in its first three months of operation. In a September 1999 letter to then director of lands Bob Pope, RTT general manager John Wan Hak-chung projected the company's losses as he tried to get permission to berth ocean-going vessels. '[After the HK$50 million in 1998] we anticipate a further loss of up to HK$200 million in 1999 and HK$300 million in 2000,' Mr Wan said. 'These losses threaten the viability of the project.' Mr Wan made it clear he held the government at least partially responsible for the RTT's dismal performance. 'The unsatisfactory performance ... is caused not only by the general economic recession,' he said. 'Some government actions and approaches have also contributed to the situation, for example tilting the level playing field by subsidising [public cargo working area] operators.' The court case begins on Thursday. Cosco selling stake - B5
