Arguably the highest profile change coming with China’s mega maritime merger is the demise of China Shipping Container Lines (CSCL).
The world’s seventh largest containerline will hand over all its green-hulled ships to the world’s sixth largest liner, Cosco, creating a fleet with more than 1.5m slots.
CSCL’s rise was emblematic really of China’s rise economically.
Founded in 1997 by the highly ambitious Capt Li Kelin, CSCL did not hang about – flooding any tradelane it entered with rock bottom rates to gain market share.
Now CSCL will become a strange amalgam of leftovers from the complex merger. Other parts of the Cosco/China Shipping combination are more straight forward, creating a pure boxship play, a pure tanker firm, a dedicated ports company and shifting all the dry bulk businesses under one privately held roof. However, to make these entities lots of non-core businesses needed to be housed somewhere – CSCL drew the short straw and will now be involved in container leasing and manufacturing and banking – and in urgent need of a new name. “[T]aking on container leasing, manufacturing and banking does not inspire,” said Jefferies in a research note today.
CSCL, by no means the biggest basket case among the many subsidiaries of Cosco and China Shipping, has been elected the dumping ground for non-core businesses.
Investors were unimpressed too with CSCL’s shareprice sliding 26.05% today to close on HK$2.30.