Sembcorp Marine has obtained approvals from the Chinese authorities to sell its stake in Cosco Shipyard Group.
To remind, the Singapore-based rig builder in November 2016 said it would sell its shares in Cosco Shipyard Group for $220 million to China Ocean Shipping (COSCO).
In an announcement on Monday, January 30, 2017, Sembcorp said that the relevant Chinese regulatory authorities have approved the sale of shares in CSG to COSCO and a new Foreign-Investment Enterprise Certificate has been issued.
“Parties will finalize payment arrangements within the stipulated time under the sale and purchase agreement, expected to be completed by 1Q2017,“ Sembcorp said.
Announcing the sale last year, the rig builder said it expected it to be completed by the end of 2016.
Cosco Shipyard Group Sembcorp is divesting is a ship repair, conversion and shipbuilding group which owns six shipyards in China. SembMarine first announced its acquisition of the 30 percent stake in Cosco Shipyard Group in 2004.
Explaining the rationale behind the decision to divest the Cosco Shipyard Group stake, SembMarine last year said the Chinese company was no longer a strategic investment, nor a core asset for SembMarine.
Apart from this, SembMarine will gain of approximately S$48.32 million over the carrying value of the investment in Cosco Shipyard Group of S$180.10 million. SembMarine said it would use the net proceeds from the proposed sale for working capital.
Subject to receiving all the relevant approvals, the sale is expected to be completed by the end of the year.
Worth noting, while selling its direct 30 percent stake, Sembcorp Marine remains involved in Cosco Shipyard indirectly. Namely, the Singaporean company has a 4.98 percent shareholding in Cosco Corporation (Singapore) Ltd, which in turn has a 51% equity interest in Cosco Shipyard Group.
Offfshore Energy Today Staff