China Cosco Shipping Holdings has further extended its stock trading suspension today, following a trading suspension by the company since May 17.
The Chinese shipping conglomerate has confirmed that it is planning a major asset restructuring and there are still lots of uncertainties in the potential restructuring deal.
In 2016, Cosco Group and China Shipping Group completed a merger, which is one of the most complicated capital restructurings in China, involving almost every sector of the shipping business including dry bulk, containers, tankers, LNG, specialised vessels, shipyards, ports, leasing and finance, insurance, and shipping services.
Xu Lirong, president of the merged group, said last year that the company still needs a couple of years to integrate assets internally at several different levels of the business and he admitted the integration process would be very challenging.
So far Cosco has integrated its container, tanker, bulk, finance and shipyard businesses.
“The restructuring probably will take longer than the group’s expectations, as the goal of the merger is not to create a larger scale corporation, but to increase profitability, risk resistance capacity and create synergies among different businesses within the group. So far Cosco Shipping Group has built up a structure for the restructuring, and it takes time to gradually optimise each part of conglomerate and make them work closely with each other,” said a shipping analyst at China’s Guotai Junan Securities.