Zhuhai Port (Hong Kong) Co., Ltd, a subsidiary of the state-owned Zhuhai Port Holdings, is acquiring Hong Kong-listed Chinese logistics port Xinghua Port Holdings Ltd for as much as HK$ 2.1 billion ($271 million), according to a company statement.
The company plans to buy all the shares from Xinghua’s shareholders, the Huang family (60.81%), and Petroships Investment Pte. Ltd (9.56%).
Zhuhai Port said that the deal will count for 36.77 per cent of the latest audited net asset.
Following the transaction, Zhuhai Port (Hong Kong) will fully-own Xinghua Port Holdings. In addition, Xinghua Port will delist from The Stock Exchange of Hong Kong (HKEX).
The proposed deal is waiting for approval from The Securities and Futures Commission of Hong Kong and HKEX.
Located at Pearl River Delta’s Zhuhai, Zhuhai Port Holdings has a competitive presence in the west bank of the delta region following the acquisitions of Yunfu New Port, Wuzhou Stevedoring and Guiping Xinlong Port in 2019, respectively. The company got listed in Shenzhen in 1993.
It has over 10 billion yuan ($143 million) in assets under management as of March 2020. Its net profit booked a 42.72 per cent year-on-year growth for the first quarter of this year.
Zhuhai Port Holdings set up Zhuhai Port (Hong Kong) with registered capital of HK$7.8 million ($1 million) to manage cross-border investments and trade services.
The acquisition will help Zhuhai Port Holdings to expand the port business to East China.
Xinghua Port owns two ports in Yangtze River Delta region’s Changshu, provides port and logistics services for industries such as steel products, pulp and paper, and logs. It generated 230 million yuan ($33 million) in annual earnings in the first half of 2020, up 17.9 per cent compared to the previous year.
State-owned Central SOEs Industrial Investment Fund for Poor Area had made an undisclosed equity investment in Zhuhai Port Holdings in May 2019. Earlier in 2017, Agricultural Bank of China’s subsidiary ABC International had also invested in the port.