Shanghai Stock Exchange Grills COSCO Shipping over OOIL Deal

COSCO Shipping Holdings has received a letter of inquiry from the Shanghai Stock Exchange asking clarity on the company’s “significant assets reorganization” and asset acquisition, mainly the purchase of Hong Kong-based rival Orient Overseas International Limited (OOIL).

The offer, made to all shareholders of the world’s seventh largest container shipping line earlier this month would total in USD 6.3 billion.

On completion, assuming all OOIL shareholders tender their shares, COSCO would hold 90.1%, while SIPG would hold 9.9% of OOIL.

According to COSCO, the transaction still needs to be approved by the EU and US antitrust bodies.

The Shanghai Stock Exchange (SSE) wants to know whether there is a possibility that the deal might not pass the anti-monopoly review, and what would be the impact and risk should that be the case.

Additional information has been requested on the financing arrangements, especially with regard to those with overseas creditors, along with the very valuation process of the deal, and manner of achieving synergies between the two companies following the merger.

Furthermore, the stock exchange is seeking information on how COSCO plans to keep OOIL listed on Hong Kong’s stock exchange with less than 25% public ownership planned to be retained. As informed, the stake proportion does not meet the Hong Kong stock exchange’s listing criteria.

COSCO has been given until July 25 to provide relevant documentation on the issues at stake.

World Maritime News Staff