Guangzhou Shipyard Surges After $900 Million of DealsClement Tan
Guangzhou Shipyard International Co., a unit of China’s biggest shipyard, surged 72 percent on its first day of trading in seven months after announcing about 5.5 billion yuan ($900 million) of acquisitions.
The stock jumped the most on record in Hong Kong after the company said it plans to buy CSSC Huangpu Wenchong Shipbuilding Co. for 4.5 billion yuan. Guangzhou Shipyard said it would also purchase shipbuilding assets from Yangzhou Kejin Shipyard Co. for 968 million yuan.
The shipyard soared as much as 94 percent earlier after the stock resumed trading following a suspension on the Hong Kong and Shanghai exchanges April 4, pending restructuring announcements. China is revamping its shipbuilding industry that has been saddled with debt and overcapacity with some private vessel builders seeking state financial assistance.
Guangzhou Shipyard climbed to HK$23.65 at the close in Hong Kong trading, while rising 9.9 percent in Shanghai.
Guangzhou Shipyard plans to issue 272 million shares to buy Huangpu Wenchong from their mutual parent, state-owned China State Shipbuilding Corp., the Guangzhou-based company said in a stock exchange filing Oct. 31. It will fund the remainder with 679 million yuan in cash.
The purchase of Huangpu Wenchong will help “deepen reform of military enterprises” since the company builds military vessels, Guangzhou Shipyard said. China State Shipbuilding is China’s largest shipyard.