Hong Kong-headquartered Singamas Container Holdings will sell four of its container manufacturing units in China to Cosco Shipping Financial Holdings for US$562 million, confirming an announcement in March of such a sale, reports Singapore's Splash 247.
Singamas is also a unit of Singapore's Pacific International Lines (PIL). SS Teo is chairman and CEO, having recently taken over from his father Chang Yun Chung, aged 99, and reckoned to be the world's oldest billionaire.
Cosco Group also holds 14.5 per cent in Shenzhen's CIMC (China International Marine Containers), the world's largest container manufacturer with over 40 per cent of global market share.
Singamas will sell the four subsidiaries Qidong Singamas, Qingdao Pacific, Ningbo Pacific and Singamas Container (Shanghai) to Cosco. Qingdao Pacific also has a fully owned subsidiary Qidong Pacific.
Singamas believes that the disposal will be an important step towards transforming its traditional business into logistics and manufacturing specialised containers.
Singamas will use the proceeds from the sale for debt repayment, distribution of special dividend and general working capital.
In January, Maersk's container manufacturing unit Maersk Container Industry also decided to stop manufacturing dry containers and focus on reefers.
Cosco is currently engaged in the container manufacturing business through its subsidiary Shanghai Universal Logistics Equipment, which has an annual manufacturing capacity of 500,000 TEU.