China Merchants Energy Shipping (CMES), the energy shipping unit of China Merchants Group, has announced a plan to acquire the dry bulk and LNG shipping assets from its subsidiary Sinotrans & CSC as it continues internal restructuring efforts with Sinotrans & CSC following the merger between the two state-run groups.
Under the latest deal, CMES will spend RMB6.57bn ($954m) to acquire several Sinotrans & CSC subsidiaries that control nine capesize bulkers, eleven panamax bulkers, 21 handysize bulkers and has a 25.5% equity interest in five Yamal LNG carriers, as well as Sinotrans Ship Management.
CMES will use a combination of internal capital and overseas loans to fund the acquisition.
CMES said the latest acquisition deal will entirely solve the competition issue between the two companies and will significantly expand the company’s dry bulk fleet. The company currently owns a bulker fleet of 21 capesizes and 12 ultramaxes.
China Merchants and Sinotrans & CSC completed a merger in 2017 and has been consolidating their assets since then. China Merchants has taken over the shipbuilding assets from Sinotrans and transferred its logistics assets to Sinotrans.