Greater ChinaShipyards

CSSC initiates restructuring to pave way for CSIC merger

Chinese state-run shipbuilding conglomerate China State Shipbuilding Corporation (CSSC)’s listing platform, CSSC Holdings, has announced plans to initiate restructuring for three of its subsidiary yards and its marine propulsion business ahead of what looks increasingly like a mega merger with its northern neighbour, China Shipbuilding Industry Corporation (CSIC).

The shipbuilding group plans to start a debt-to-equity scheme for Jiangnan Shipbuilding, Huangpu Wenchong Shipbuilding and Guangzhou Shipyard International through issuing new shares to investors and fund raising.

CSSC Holdings said the plan is in line with the controlling group’s development strategy and it has suspended its stocking trading due to the potential restructuring deal.

Additionally, CSSC Offshore & Marine Engineering, the parent company of Huangpu Wenchong and Guangzhou Shipyard International (GSI), announced that the company will take over the marine propulsion asset from CSSC Group including full equity of Hudong Heavy Machinery and CSSC Marine Power, 51% equity of CSSC Propulsion Research Institute and 15% equity of CSSC-MES Diesel, and transfer its shareholdings in Huangpu Wenchong and GSI to its CSSC Group.

Following the transactions, CSSC Offshore & Marine Engineering will become the marine propulsion platform of CSSC.

The potential restructuring is believed to be paving the way for a long expected merger between two major Chinese shipbuilding groups CSSC and CSIC. The two shipbuilding groups are reportedly accelerating preparations for the merger and a detailed merger plan is expected to be finalised this year.

Last week, CSIC announced a plan to merge its two flagship yards Dalian Shipbuilding Industry and Bohai Shipbuilding Industry.

CSIC is also giving up on its non-profitable assets. Three loss making subsidiaries of DSIC including DSIC Offshore, Dalian Shipbuilding Industry Steel and Dalian Shipbuilding Industry Marine Services, are being liquidated by courts.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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