Singamas records a loss on box manufacturing sell off

Singamas container
Singamas drops the humble dry box

Hong Kong-listed Singamas Container Holdings is to offload five of its companies to Cosco Shipping Financial Holdings for Rmb 3.8bn (US$565m). The company reckons it would likely emerge from the deal with a US$15m loss.

The companies to be sold include three container manufacturing factories (Qidong Singamas Energy Equipment, Qingdao Pacific Container, Ningbo Pacific Container), an R&D centre (Singamas Container (Shanghai) Limited), and one depot (Qidong Pacific Port), a wholly-owned subsidiary of Qingdao Pacific.

The business of the companies to be sold include manufacturing of dry freight, specialized and refrigerated containers, provision of terminal services and provision of technical and development of services container manufacturing in China.

The proceeds of the sale are to be ploughed back into repayment of bank loans, a special dividend distribution, and general working capital.

The sale of the five operations signals a fundamental shift in focus for Singamas: the Group said in a note to the Hong Kong Stock Exchange it would concentrate on the production of specialised containers, putting emphasis on marketing and developing personalized and customized high value-added specialized containers and the logistics services business.

“In light of the increasing demand for personalized and customized high value-added specialized containers, the Group believes this segment will be the key growth driver in the future,” the company said

Singamas will continue to operate its container manufacturing operations in five production sites in the PRC; its logistics services business including ten container depots in the PRC and Hong Kong and one logistics company in Xiamen.

The Group’s logistics services business forms an integral and complementary service for its container manufacturing service. Other than the ten container depots in the PRC and Hong Kong and one logistics company in Xiamen, the Group also established a joint venture in India to provide industrial chemical liquid transportation in India as part of a strategy to strengthen its presence in the logistics service space.

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