NASDAQ-listed Sino-Global Shipping America has cancelled its acquisition of a small chemical tanker in order to reevaluate its business strategy.
In April, Sino-Global paid Hong Kong-based Rong Yao International Shipping $10.5m plus a tranche of 1.2m shares (then worth $2.22m) for the sale of its small oil/chemical tanker Rong Zhou (8,818 dwt, built 2010), giving the Chinese company a 16.21% stake in Sino-Global.
Rong Yao will return the 1.2m shares of Sino-Global’s common stock to the company and all ship management and timecharter agreements between the two parties will be terminated. Sino-Global said it will release the mortgage on the Rong Zhou following “payment in full of any balances”.
“We felt our time and resources were best spent focusing on the upside potential of our shipping and logistics services,” Lei Cao, CEO of Sino-Global, said today in a statement.
“We believe that with greater scale we could integrate an asset management component to our operations but currently feel that there are substantial opportunities to leverage our asset-light platform to grow.”
In mid-November, Sino-Global received a notice of non-compliance from NASDAQ after its stock traded at below $1.00 per share for over 30 consecutive business days between September 5 and November 5.
The company has an 180-day period ending May 4, 2016 in which to regain compliance by achieving a share price of over $1.00 for a minimum of 10 consecutive business days.
The stock is currently trading at $1.09 per share, having broken through the $1.00 mark on December 3.
Sino-Global announced a stock repurchase programme in October, in which the company plans to spend up to $100,000 buying back its shares during the fourth quarter 2015.