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Cosco roars back with massive new shipping fund

Cosco roars back with massive new shipping fund

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After years in Beijing’s bad books, the world’s largest shipping conglomerate made its intent clear today to get back on the acquisition path.

State-run China Cosco Shipping Group, the merged entity between Cosco and China Shipping, has been through a rough period financially and politically this decade with sensational losses, high profile jailings and a difficult merger.

However, the government has now sensed the time is ripe for it to make the most of the current markets as well as giving it a spearhead role in the One Belt, One Road (OBOR) initiative, president Xi Jinping’s intercontinental trade and transport drive.

Cosco Shipping Development’s director of shipping finance and investment Jin Hai revealed at ship finance conference in Tianjin today that the group is to establish an international fund to invest in shipping assets. The fund will be split in two – RMB and US dollars – and will not just focus on ships but also non-performing assets, restructuring targets and asset-backed securitisation.

Cosco has tapped a number of China’s top financial institutions to come onboard the fund, more details of which will be revealed soon, Jin said.

“Our plan is to team up with financial institutions that have interests in shipping to setup a platform in order to serve the whole shipping industry,” Jin said. Sources tell Splash the fund will kick off with billions of dollars ready to swoop.

China’s 10 major financial leasing companies completed total shipping financing volume of $11.5bn in 2016, up 40% over 2015. Jin said today he was optimistic that figure could grow to as high as $15bn this year.

Cosco has been tapped to be one of the key state firms to lead OBOR. Yesterday, Cosco and Lianyungang Port jointly signed an investment agreement for the Khorgos-Eastern Gate Free Economic Zone (FEZ) project in Kazakhstan. The companies plan to further develop the railway network linking China and Europe at the Central Asian FEZ.

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Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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