COSCO Shipping Ports Co. Limited (hereinafter referred to as CSP) issued a public announcement on August 23, claiming that Shanghai Terminal Development Co. Limited, a wholly-owned subsidiary of CSP, intended to sign a consortium agreement with COSCO SHIPPING Tianjin and one or more investors. The consortium would seek to acquire a maximum of 5,519,895,784 shares of CCCC Dredging Group (accounting for about 40% of the company’s issued share capital) from China Communications Construction CO., Ltd. (hereinafter referred to as CCCC) in China Property Exchange through public bidding within China.
According to the consortium agreement, if the consortium succeeds in the listing process, Shanghai Terminal Development Co. Limited, COSCO SHIPPING Tianjin and other investors would acquire 1,379,973,946 shares of the CCCC Dredging Group (accounting for approximately 10% of the expanded share capital of CCCC Dredging Group Co., Ltd.), 689,986,973 shares of the CCCC Dredging Group (accounting for approximately 5% of the company’s enlarged issued share capital of CCCC Dredging Group Co., Ltd.) as well as the rest selling shares respectively. If the number of the Company's selling shares is less than 2,069,960,919 (accounting for approximately 15% of the company’s enlarged issued share capital), Shanghai Terminal Development Co. Limited and COSCO SHIPPING Tianjin would reach an agreement on their respective acquisitions of the CCCC Dredging Group’s shares, and be clearly stated in the consortium agreement. As a result, Shanghai Terminal Development Co. Limited will acquire no more than 1,379,973,946 shares of the CCCC Dredging Group (which accounts for approximately 10% of the company’s enlarged issued share capital), whose cost would not exceed approximately 3,409 million yuan.
It is reported that CCCC Dredging Group is a subsidiary of CCCC and is established under the law of the PRC. The business scope of CCCC Dredging Group mainly includes infrastructure dredging, dredging maintenance, environmental dredging, reclamation and supporting projects related to dredging and sand excavation for engineering construction. CCCC Dredging Group’s net profits hit 1.955 billion yuan, 1.267 billion yuan and 81.459 million yuan in 2017, 2018 and the first quarter of 2019, respectively.
CCCC Dredging Group is the world’s largest dredging company with a domestic market share of about 70%. With relatively stable investment returns and a considerable business volume, it remains the market leader in the industry. Besides, CCCC Dredging Group has been actively participating in environmental protection and developing marine engineering business as well as expanding its overseas business. It is anticipated that the relevant cooperation with CCCC Dredging Group would provide stable net profits and growth potential for China COSCO SHIPPING.