SINGAPORE 19 February 2014
Pan-United Corporation Ltd (PUC, the Group or æ³èéå¢), through its 85.5%-owned Changshu Xinghua Port Co., Ltd (CXP), is pleased to announce the acquisition of a 90% stake in a multi-purpose port, Changshu Changjiang International Port Co., Ltd (CCIP), for RMB436.5 million (approximately S$91.3 million).
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CXP will acquire 90% of CCIP from Changshu Binjiang Urban Construction Investment & Management Co. Ltd (CBUC) under an agreement dated 18 February 2014. CBUC will retain a 10% stake in CCIP. The purchase is expected to be completed by 25 March 2014. CBUC is wholly-owned by Jiangsu Changshu Economic Development Group (JCED), which also owns a 5% direct stake in CXP. CXP expects to finance its purchase of CCIP with cash and bank borrowings.
Located adjacent to CXP, CCIP will increase overall handling capacity by 60% to 16.0 million tons per annum, and expand the current berth length from 1.7 km to 2.8 km. The total land area will also climb, by 35%, to 1.36 sq km and warehousing space by 67% to 175,000 sq m.
Ms May Ng (é»ç¾ç¾), the Groupâs Chief Executive Officer, said: âThe acquisition enhances the facilities we can offer to our customers as well as provides increased capacity for domestic cargoes. By scaling up our port business, we can achieve commercial and operational synergies and efficiency. We are confident of improving returns from the port and creating more shareholder value in the medium term.
âWith two multi-purpose ports in our stable, we expect to increase our market share and boost our position as one of Chinaâs key logistics hubs serving the industrial hinterland along the Yangtze River. This move is also in line with PUCâs strategy to expand its core businesses and raise the Groupâs foreign-sourced income.â
Currently among the top 10 river ports in China, CXP is a key hub for pulp, logs and finished steel products for the Chinese market. As at September 2013, CXP handled over 16% of Chinaâs pulp imports and 18% of the nation's log imports from New Zealand.
CCIP, which became operational in November 2012, will contribute immediately to PUCâs port revenue. Although CCIP recorded a 30% utilisation rate in FY2013, the Group is positive that by leveraging on CXPâs track record and its strength in handling bulk cargoes, significant volume growth can be achieved for CCIP.
Ms Ng added: âThe expanded port will allow us to optimise the joint facilities and operational efficiencies as CXP can focus on larger ships while CCIP will concentrate on smaller vessels and domestic cargo.â
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