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Shenzhen Stock Exchange questions CSC Phoenix takeover

Shenzhen Stock Exchange questions CSC Phoenix takeover

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Shenzhen Stock Exchange has sent a notice to Guangdong Wenhua Furui Investment, the new owner of domestic dry bulk shipping company CSC Phoenix, requesting explanations to a series of questions the stock exchange requires answers to.

Tianjin Shunhang Shipping reached an official share transfer agreement with Guangdong Wenhua Furui in April to sell its entire 17.89% equity stake in CSC Phoenix to the latter, after it failed to restructure CSC Phoenix into a dredging company.

The price of the deal is RMB1.9bn ($274m), about 30% higher than the price of RMB1bn ($145m) that Tianjin Shunhang Shipping paid to state-run Sinotran & CSC to acquire the shares in June 2015.

The stock exchange has requested an explanation on the basis and rationality of pricing in the deal.

In the meantime, the stock exchange has found Guangdong Wenhua Furui changed its legal representative before the share transfer deal and also requested an explanation on whether the move is related to potential beneficial arrangement.

After the takeover, Guangdong Wenhua Furui promised to inject telecoms assets into CSC Phoenix within one year, however, it is not holding any telecoms related assets. According to the registration files, Guangdong Wenhua Furui mainly engages in the business of automobile trade and real estate. The stock exchange questioned its ability to deliver on its promise.

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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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