OOCL, the Hong Kong containerline at the centre of renewed speculation over a takeover by Cosco, has firmly dismissed the rumours surrounding its future.
The Wall Street Journal and other titles have claimed in recent days that China’s state-backed Cosco is close to sealing a $4bn-plus deal to buy out the line controlled by the Tung family.
A spokesperson for OOCL, however, has told Splash that the rumours are incorrect.
“There have been certain media and newspaper reports published in recent days regarding the company. The company confirms that it is not involved in, nor is it aware of, any bid relating to OOIL or OOCL,” the spokesperson told Splash, adding: “The company remains committed to serving its customers with the best possible product, and maintaining its traditional operational excellence and robust balance sheet.”
This is not the first time that OOCL has been linked with a buyout from Cosco by the WSJ. When the newspaper carried a report in January that Cosco was in talks to take over OOCL, Andy Tung, the CEO of the Hong Kong liner, issued an email to all staff in which he described takeover talk as “untrue”.
Cosco Shipping officials, meanwhile, remain tightlipped on their intentions. Shares in Shanghai have been suspended since May 17, pending a significant announcement. The stocks did not resume trading after Cosco Shipping announced on June 12 $3bn worth of port deals, buying into Shanghai International Port Group and taking a 51% stake in Spanish port operator Noatum. Cosco’s shares continue to trade in Hong Kong and Singapore however.
Cosco Shipping International, its Singapore-listed entity, was quizzed by the Singapore Exchange yesterday on the “unusual price and volume movements” of its shares. Cosco Shipping International responded today, noting that having disposed of its shipyard assets, the cash raised could be used for acquisitions.
“The company also announced that it intends to use the sale proceeds from the proposed disposal to fund future projects, which may include mergers and acquisitions, and for working capital requirements of the group,” Cosco Shipping International stated in reply to the Singapore Exchange’s questioning, adding that management “has commenced and is actively reviewing potential investment opportunities”.