China Merchants Heavy Industry (CMHI), the shipbuilding arm of state-run China Merchants Group, has initiated a mixed-ownership reform by tapping private investors to invest in the company, as part of the central government’s effort to reform state-owned enterprises (SOEs) by optimising their asset structures, Chinese financial media Caixin reports.
A source at CMHI told Caixin that the reform will be conducted in different stages and eventually promote the listing of the company, however a detailed plan for the reform hasn’t been finalised yet.
According to the source, the company has already started preliminary discussions with potential investors including Aluminum Corporation of China (Chalco).
The move by China Merchant is believed to be part of a general massive shakeup in the Chinese shipbuilding sector which also sees two largest state-run shipbuilding groups CSSC and CSIC reuniting.
China Merchants has also been consolidating its shipbuilding assets. Earlier this year, China Merchants has integrated the shipbuilding assets of Sinotrans into CMHI and it also took over the AVIC Weihai Shipyard from AVIC Holdings in April as the latter is looking to quit the shipbuilding business.
CMHI is currently the fourth largest state-run shipbuilding group in China following CSSC, CSIC and Cosco Shipping Heavy Industry.