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Keppel sells stakes in Keppel Logistics (Foshan), Keppel Logistics (Hong Kong)
KEPPEL Telecommunications & Transportation (Keppel T&T) has entered into agreements to divest its entire stakes in Keppel Logistics (Foshan) Co (KLF) and Keppel Logistics (Hong Kong) to Sinoway Shipping for about S$39 million.
Sinoway Shipping is a subsidiary of Sinotrans Limited.
"The proposed divestments are in line with Keppel T&T's strategy to unlock value and recycle capital, allowing the company more flexibility to pursue other opportunities," said Keppel T&T.
The deal is expected to be completed this year, subject to certain conditions being fulfilled.KLF provides port business services, dock operations and warehousing services, and owns among others, Lanshi port (which is pending closure due to redevelopment plans by the local government) and a 60 per cent interest in Keppel Logistics (Foshan Sanshui Port) Company, which operates Sanshui port.
Keppel T&T will sell its 70 per cent interest in KLF to Sinoway Shipping for 176.4 million yuan (S$34.2 million). Sinoway Shipping will also provide 48.5 million yuan to KLF for it to repay its shareholders' loan due to Keppel T&T.In addition, the parties have agreed that - post-completion - a special working team, comprising representatives from KLF, Keppel T&T and Sinoway Shipping, will be set up to negotiate with the local government on the compensation for Lanshi port closure. After KLF has received such compensation, Sinoway Shipping will work towards liquidating KLF, and Keppel T&T will be entitled to 70 per cent of the proceeds of the liquidated assets of KLF.
Meanwhile, Keppel T&T's wholly-owned subsidiary, Steamers (HK) Limited (Steamers) will sell its 70 per cent interest in KLHK to Sinoway Shipping for 25.8 million yuan. KLHK provides freight forwarding and barging services between Hong Kong, Shenzhen and Foshan.