Pan-United unit acquires cargo port facility firm
MAINBOARD-listed Pan-Uni-ted Corp (PUC) has acquired 90 per cent of Changshu Changjiang International Port (CCIP), a multi-purpose port located along China's Yangtze River, for 436.5 million yuan (S$90.8 million).
PUC, through its 85.5 per cent owned unit, Changshu Xinghua Port (CXP), signed an agreement for the acquisition from Changshu Binjiang Urban Construction Investment & Management (CBUC) on Tuesday following an open tender. CBUC will retain a 10 per cent stake in CCIP. The purchase is expected to be completed by March 25.
CXP expects to finance its purchase of CCIP with cash and bank borrowings.
CCIP owns and operates a multi-purpose break bulk port facility, located next to CXP. It became operational in November 2012. The net tangible asset value of CCIP based on unaudited financial statements as at Dec 31, 2013, is 367.9 million yuan.
Jiangsu Changshu Economic Development Group, a local state-owned entity, owns CBUC. JCED also holds a 5 per cent stake in CXP.
"As the operations of CCIP and CXP are complementary and the ports are located next to each other, the company is of the opinion that CCIP will provide commercial and operational synergies with the current operations of CXP," PUC said yesterday.
"Located adjacent to CXP, CCIP will increase overall port handling capacity by 60 per cent to 16 million tonnes per annum, and expand the current berth length from 1.7 km to 2.8 km. Total land area will also climb by 35 per cent to 1.36 sq km, and warehousing space by 67 per cent to 175,000 sq m," said PUC.
"With two multi-purpose ports in our stable, we expect to increase our market share and boost our position as one of China's key logistics hubs serving the industrial hinterland along the Yangtze River," said May Ng, chief executive officer of PUC.
This integration is expected to result in the diversification, expansion and stability of the cargo base of both ports, as CXP is in a position to optimise its port facilities by focusing on larger ships while CCIP's port facilities are more suited for smaller ships and domestic cargoes, PUC said.
"This move is also in line with PUC's strategy to expand its core businesses and raise the group's foreign-sourced income," Ms Ng added.
PUC's shares ended unchanged at 92 cents yesterday.
