China COSCO, COSCO Pacific, China Shipping Container Lines (CSCL), and China Shipping Development (CSD) have announced plans to restructure key assets, kicking off the SOE reforms in China’s shipping industry. The restructuring and consolidation will create one of the world’s four largest container lines companies, with a fleet of 288 container ships, of which 84 ships are larger than 8,000 TEUs, and total shipping capacity of approximately 1.6 million TEUs. This restructuring and consolidation will help us combine these quality resources, thus laying a solid foundation for us to enhance the core competitiveness.
COSCO Container Lines (COSCON), a subsidiary of COSCO, will rent CSCL’s assets, including ships and container boxes, etc, and divest the bulk shipping business, meanwhile, COSCO Pacific will buy the port assets of China Shipping and CSCL in order for COSCO to consolidate the container shipping and port businesses. CSCL will achieve business transformation by leasing ships and container boxes; acquiring the leasing business held by COSCO and China Shipping; and injecting other ship financing business and assets.
As the leading companies in China’s shipping industry, COSCON and CSCL have cooperated with each other for years. By the restructuring and consolidation, we will greatly improve the new company’s core competitiveness. For our investors, the integration of quality resources and capture of the synergies can bring better investment return; for our customers, expanded shipping capacity and widened scope of the business will optimize the route network, and improve the fleet structure, thus enhance our ability to deliver higher-quality customer services and meet more rigorous service standards; for our suppliers, it provides a better platform with even more cooperation opportunities. The restructuring and consolidation will also offer our employees more diversified career development opportunities.
We expect to start the business integration at the beginning of next year and complete the transition within one year. Our top priority is to ensure business continuity. We will communicate with you in advance in case of any changes.