Cosco Pacific Sells CIMC Stake to Parent for $1.2 Billion

Cosco Pacific Ltd. (1199), the container-terminal arm of China’s largest shipping group, agreed to sell its stake in the world’s largest shipping-container manufacturer to its parent for $1.22 billion.

The company will sell Cosco Container Industries Ltd., the major asset of which is its 21.8 percent holding in China International Marine Containers Group Co. (2039), to a unit of China Ocean Shipping Group Co., according to a Hong Kong stock exchange filing yesterday.

The sale allows the company to “realize a return on its investment in CIMC” and to “redeploy its resources into business which are expected to create enhanced value to shareholders” and aid profitability, Cosco Pacific said.

Cosco Pacific’s first-quarter net income fell 14 percent from a year earlier to $66.1 million as operating costs from the terminal business increased. CIMC’s quarterly profit fell to 219.4 million yuan ($35.7 million) from 375.3 million yuan a year earlier, according to data compiled by Bloomberg.

The deal is subject to approval by the independent shareholders of both Cosco Pacific and immediate controlling shareholder China Cosco Holdings Ltd., according to yesterday’s filing.

Cosco Pacific rose 3.6 percent, the biggest gain since Jan. 3, to close at HK$10.80 in Hong Kong yesterday, before the announcement. China Cosco advanced 2.7 percent to HK$3.42.

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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