Aug 11, 20153:36 PM
BEIJING is seeking to complete the merger of two of the country’s largest state-owned shipping companies – China Ocean Shipping Group (Cosco) and China Shipping Group – around 2017 in a bid to tackle the industry slump, South China Morning Post reported on Tuesday.
Together, the two groups control 11 listed entities in Shanghai, Shenzhen, Hong Kong and Singapore. If the merger is realized, the new shipping company would emerge as the fourth largest, just behind France’s CMA CGM with 1.78 million TEUs.
China Cosco Holdings, China Shipping Development (CSD) and China Shipping Container Lines (CSCL), the three dually listed flagships, applied for a trading halt after the market close on Friday. They told the Shanghai bourse that they were planning on “material matters”.
Cosco Corporation (Singapore) has requested a trading suspension on its shares early Tuesday, pending the release of an announcement which it said is related to the plan by its parent firm on a significant transaction that may have an impact on the company’s securities.
According to Nikkei Asian Review, Chinese leaders have been urging state-owned enterprises to expand overseas, and apparently want the two shipping companies to focus on this front rather than compete against each other in the domestic market.
The Japanese media said the State Council will take the lead in establishing a group to formulate restructuring and other reform efforts for the shippers and the industry as a whole. The two companies’ top executives will join the group. Reform measures will be released within three months.