Purchase of 6b yuan stake in SIPG offers vital foothold and paves way for listing
China Merchants Holdings International will pay six billion yuan to take a 30 per cent stake in Shanghai International Port Group (SIPG), according to industry sources, giving the Hong Kong-listed company an interest in Shanghai's coveted Yangshan port project.
The deal will give China Merchants, whose port operations are mainly in Shenzhen and Hong Kong, a vital foothold in the Yangtze River Delta as well as a leg-up on the foreign port operators and shipping lines that have been jockeying for a piece of Yangshan.
SIPG holds a 75 per cent stake in Shanghai Port Container (SPC), which is developing Yangshan's first five berths. SPC also has a 40 per cent interest in three berths in the first phase of Shanghai's Waigaoqiao port and a 50 per cent interest in four berths in the third phase.
China Merchants' investment in SIPG is part of a larger restructuring in preparation for a possible Hong Kong listing by the latter next year, according to market sources. The State-owned Assets Supervision and Administration Commission will remain SIPG's largest shareholder, with a 50 per cent stake, while the Shanghai government's Tongsheng Investment Group will hold 19 per cent.
'We just signed the agreement with China Merchants. It will hold 30 per cent of our company,' a senior SIPG executive told the South China Morning Post yesterday.
Trading in China Merchants' shares was suspended yesterday, pending a price-sensitive announcement. Pu Xueqian, its general manager for strategy and development, declined to comment on the reason for the suspension but said that the firm was 'exploring all opportunities' to participate in Yangshan's development.
