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Tianjin Port Development consolidates control
2009/3/18
Tianjin Port Development (TPD) has agreed to pay US$1.4 billion for a controlling stake in Shanghai-listed Tianjin Port Holdings Co Ltd in a consolidation of Tianjin''s port assets, the China Daily reported.
TPD will issue $906.8 million of new shares to the state-owned Tianjin Port Group and pay $506.9 million in cash for the 56.81 percent stake in its rival Tianjin Port Holdings.
Through the acquisition, Tianjin Port Development effectively consolidates the port assets under Tianjin Port Group and becomes the largest single-location port company listed on the Hong Kong stock exchange.
TPD has significant exposure in the container handling business at the port of Tianjin, it also is involved in the bulk cargo business. Tianjin Development, terminal operator at the port of Tianjin, will be holding an interest in and influence over Tianjin Port Development.
TPD Chairman Yu Rumin said it is a win-win deal for all companies. Yu is also the chairman of Tianjin Port Group, Tianjin Port Holdings and acting chairman of Tianjin Development.
"Earnings per share for all shareholders will be enhanced after the deal," Yu said. He stressed that the deal will effectively lead to integration of port assets in the port of Tianjin, "it is good for the companies to battle the financial crisis."
The deal will also be settled in cash. TPD Vice Chairman Nie Jiansheng said the company may issue new shares, borrow funds or use internal resources to fund the cash portion of the deal.
Tianjin Port Group will hold at least 51 percent of TPD after the deal is concluded. The agreement awaits approval of TPD shareholders and regulators.
Yu said TPD hasn''t decided whether it will issue new shares to fund the acquisition.
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2009/3/19