Cosco tipped to buy Singamas

Pacific International Lines (PIL) has got an old friend to come in and buy its shares in subsidiary Singamas, the world’s second largest manufacturer of containers.Sources in China tell Splash that Cosco has tabled a bid to take Singamas off PIL’s books, providing some cash for the containerline, which has struggled in the first half, sliding to a $141.2m loss in 2018, compared to a $26.4m profit in the first half last year.In July 2017, PIL pledged its shares in Hong Kong-listed Singamas, in which it has a 41.1% stake, to raise bank loans of around $180m. PIL said in July last year that it was obliged to sell its Singamas shareholding within 20 months for at least $180m or at a price acceptable to its creditors.The deal with Cosco is expected to be finalised in early 2019, Splash understands, marking Cosco’s next sizeable acquisition since it took over Hong Kong containerline OOCL a couple of months ago.Founded in 1988, Singamas is a manufacturer of containers, operator of terminals and container depots and provider of logistics services. The company is the second largest container manufacturer in the world after China’s China International Marine Containers (CIMC) and has an annual manufacturing capacity of over 1m teu, controlling around 20% of the global market share. Singamas currently operates nine container manufacturing facilities in China.Cosco is currently engaged in the container manufacturing business through its subsidiary Shanghai Universal Logistics Equipment, which has an annual manufacturing capacity of 500,000 teu. It also holds around 14.5% equity interest in CIMC, the world’s largest container manufacturer with over 40% of the global market share. Additionally, the Chinese shipping conglomerate has a major presence in the container leasing through its subsidiary Florens.In July, Singamas entered into an agreement with China’s Huizhou Shunjingyuan Industrial to sell full interest in one of its manufacturing factories, Huizhou Pacific Container for RMB735m ($106.8m).Officials at Cosco declined to confirm the Singamas acquisition when contacted by Splash today.PIL and Cosco have had a close relationship for many years, operating many joint services and chartering ships to each other. SS Teo, the head of PIL, serves on Cosco’s board of directors.

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