Yangzijiang proposes spin-off and listing of investment unit to focus on asset management, direct investments

YANGZIJIANG Shipbuilding has proposed a spin-off and listing of the group's investment segment via the transfer of existing investments to a newly incorporated company that will focus on asset management and direct investments.

This will create 2 separate listed companies to pursue more targeted business strategies and accelerate growth, said the group in a bourse filing on Monday (Nov 29).

It has targeted for the proposed spin-off and listing to be completed in 6-12 months.

But to be clear, plans are still in the preliminary stage; and the group has not formally consulted the Singapore Exchange Securities Trading Limited.

As 2 independently run companies, the businesses will each benefit from sharpened operational focus and strategic and financial flexibility to pursue growth opportunities, among others, said Yangzijiang.

Currently, its principal activities under the investment segment consist of microfinancing, debt investments at amortised cost and other investments.

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With the proposed spin-off and listing, the new spin-off company is expected to realign its existing investment portfolios towards more growth-oriented investments, expanding its global footprint and growing the fee-income business - ultimately diversifying from the current single industry, country and asset portfolio.

The spin-off company will have greater capital resources and flexibility to form asset management capabilities, said the group.

As at Nov 1, 2021, Yangzijiang has secured order wins for 124 vessels worth US$7.41 billion in 2021 - its largest order wins in history - and has an order book of US$8.86 billion for 165 vessels.

It believes it is in a "strong position to execute this plan to form 2 well-capitalised, investment grade companies".

Yangzijiang's shares closed flat at S$1.30 on Monday.