Chinese domestic dry bulk shipping operator CSC Phoenix has announced that its controlling shareholder Tianjin Shunhang Shipping has reached an agreement with Guangdong Wenhua Furui to terminate a proposed share transfer deal of the company.
In April, Tianjin Shunhang Shipping signed an agreement to sell its 17.89% shareholdings in CSC Phoenix to Guangdong Wenhua Furui for RMB1.9bn ($274m) following its failure to restructure CSC Phoenix into a dredging company.
Later Shenzhen Stock Exchange questioned the deal and requested an explanation from Wenhua Furui on the basis and rationality of the pricing.
A disagreement between the two companies also surfaced during the takeover process as Wenhua Furui claimed Tianjin Shunhang had not fulfilled the contract terms requiring the reaching of debt settlement agreements with creditors.
Under the termination agreement, Shunhang Shipping will return RMB60m of the RMB100m down payment to Wenhua Furui as a settlement. However, CSC Phoenix didn’t reveal the reason for the contract termination.