COSCO Shipping Energy Transportation (01138) plans to acquire all equity of Shanghai Liquified Gas for 598 million yuan

COSCO Shipping Energy Transportation (01138) announced that the company intends to proceed with a proposed acquisition. According to the Shanghai LPG Equity Transfer Agreement, China COSCO Shipping Dalian Investment has agreed to sell and Dalian Haina (a wholly-owned subsidiary of the company) has agreed to acquire all the equity of Shanghai LPG, subject to the terms and conditions of the agreement. Dalian Haina will have the right to assume or enjoy the profits and losses of the transferred equity of Shanghai LPG during the transition period. The total cost of acquiring all the equity of Shanghai LPG is RMB 598 million, which must be paid by Dalian Haina to China COSCO Shipping Dalian Investment within 5 working days from the effective date of the Shanghai LPG Equity Transfer Agreement through bank transfer. In the fourth quarter of 2024, the company will carry out the first phase of the China COSCO Shipping Group's energy and chemical product logistics supply chain integration through the initial acquisition, as part of efforts to implement state-owned enterprise reforms, optimize resource allocation, and improve the quality of the company. The initial acquisition is a key initiative for the company to focus on the integration of energy and chemical product logistics resources, achieve synergies, better serve customer needs, and build the energy and chemical product logistics supply chain to become an industry benchmark and drive management upgrades. Following the completion of the first phase of logistics supply chain integration, the acquisition of all equity of Shanghai LPG is the primary initiative for the company to continue advancing the second phase of reform tasks. Based on current assessments, China COSCO Shipping Dalian Investment's acquisition of 100% equity of Shanghai LPG is beneficial for improving its financial profitability and accelerating the subsequent overall reform efforts of China COSCO Shipping Dalian Investment. Through this acquisition, Dalian Haina, as the unified operating platform for LPG businesses under the company, will achieve unified management of operational, asset, financial accounting, and personnel aspects for the already operational LPG transportation business, creating economies of scale and enhancing market competitiveness. Upon completion of the proposed acquisition, the company's existing operational LPG transportation assets will be further integrated into the listed company's system, creating favorable conditions for the company's subsequent major projects to be carried out in the capital market. In the long run, it is expected to increase the net profit attributable to the company's shareholders, enhance the overall operating performance of the company, and have a positive impact on the company's ability to sustain operations.