COSCO seeks global port deals in portfolio rejig

31 March 2020 - 12:00 am UTC

COSCO Shipping Ports – which has USD 957m in cash reserves – is planning a restructuring of its global holdings, with an intention to both buy and sell terminals.

The company is currently working on an outbound investment plan with a focus on potentially acquiring controlling stakes in international gateway ports or those that can provide more efficient and comprehensive services to meet the needs of parent COSCO Shipping’s alliances.

“We are in very unique times, and we need to prepare to grasp opportunities emerging during this period of time,” Executive Director Kevin Wong said in an online briefing with reporters. 

The company will also look to sell stakes in a number of terminals, the management said. 

COSCO Shipping Ports will look to sell terminals that could not reach synergies with parent COSCO Shipping as well as the other shipping line members of the Ocean Alliance, assets that have not been generating satisfactory financial returns, as well as those that do not have bright business development prospects in the long term, Wong said. 

The company has been readjusting its portfolio with disposals of stakes in February in Yangzhou and Zhangjiagang terminals in China for a total USD 251m. It plans to sell two terminals in east Jiangsu province this year. 

The USD 1.7bn capital expenditure that COSCO budgeted for 2020 will be partially used for additional investment in its existing terminals in Nantong in east Jiangsu province, Abu Dhabi as well as the Chancay Port Terminal in Peru. 

The Chinese company, which has stakes in the CSP Bilbao, CSP Valenvia and Vado Reefer terminals in virus-hit Spain and Italy, cited what it said were effective and prompt measures taken by the local management team to ensure continued operations despite the COVID-19 outbreak.

COSCO Shipping Ports has been one of the most active buyers of port assets along the route of the Belt and Road initiative. In 2019, the port operator completed the acquisition of 60% equity interests in the Chancay Port Terminal in Peru its latest expansion into Latin America.

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