COSCO moves to raise $1.79 billion capital
COSCO Shipping Development Company Limited has announced a proposed non-public issuance of about 3.28 billion shares to specific investors, including its parent company, to raise up to 12 billion yuan ($1.79 billion).
COSCO Shipping Development will become a financing platform of its parent company－China Cosco Shipping Corp, the country’s largest shipping company, according to its public statement.
The company plans to use 6 billion yuan and 2.4 billion yuan from the proceeds for the capital injection into two of its subsidiaries, COSCO Shipping Leasing Co Ltd and Florens International respectively, while it will also use 1.8 billion yuan for the redemption of maturing corporate bonds and 1.8 billion yuan to refill the working capital of the company.
The Shanghai-headquartered Cosco Shipping Development, formerly known as China Shipping Container Lines Co Ltd, mainly operates supply chain integrated financial services. It was established in 1997 and is listed both in Hong Kong and Shanghai. The company had total assets of 101.29 billion yuan by the end of June this year.
Dong Liwan, a shipping industry professor at Shanghai Maritime University, said that the move indicates the company is raising capital to further enlarge its business scale from containership operations to ship leasing, shipping finance, logistics and warehouse services, as well as healthcare and energy businesses.
“They are expected to help the company catch more opportunities likely to come from the Belt and Road Initiative and the development of the Yangtze River Economic Belt,” said Dong.
COSCO Shipping Leasing plans to invest 13.8 billion yuan in total into financial leasing assets from 2017 to 2019.