Singamas Container Holdings entered into an agreement on Monday to sell four of its Chinese container manufacturing subsidiaries to COSCO Shipping Financial Holdings for RMB3.8 billion ($562 million).
The agreement, which is set to close by Sept. 30, includes the sell of Qidong Singamas Energy Equipment, Ningbo Pacific, Singamas Containers (Shanghai) and Qingdao Pacific, which has a fully owned subsidiary Qidong Pacific.
Qidong Singamas and Qingdao Pacific both manufacture dry freight, specialized and refrigerated containers, and Ningbo Pacific manufactures dry freight and specialized containers. The three factories have an annual production capacity of about 560,000 TEUs.
Singamas Container (Shanghai) engages in the provision of technical and development services of container manufacturing, while Qingdao Pacific engages in the provision of container terminal services.
“Although traditional dry freight containers are still used in sea freight transportation, they cannot be used for the transportation of all types of goods, so specialized containers have emerged,” it said in the announcement. “With the development of international trade, the types of goods transported are dynamically changing. With the global economic integration and the development of various modes of transportation, the production and sales of specialized containers of major players in the industry have shown a trend of rising volume and price.”
Singamas will use about $300 million of the proceeds to repay bank loans, a maximum amount of $100 million will be used for distribution of special dividend and the remaining funds will be used for general corporate and working capital requirements, the company said.