COSCO ‘bid­ding’ for Ori­ent Over­seas

China Daily (Canada) - - BUSINESS - By BLOOMBERG

Source says race to buy HK’s big­gest con­tainer ship­ping line hot­ting up

Chi­nese me­dia out­let Caixin re­ported China COSCO Ship­ping Corp and other lin­ers will bid for Ori­ent Over­seas In­ter­na­tional Ltd, owner ofHongKong’s big­gest con­tainer-ship­ping line.

Ever­green Ma­rine Corp Tai­wan Ltd andCMACGMSAare also bid­ding, ac­cord­ing to the re­port, which cited an uniden­ti­fied em­ployee of COSCO Ship­ping.

Ori­ent Over­seas stock jumped as much as 12 per­cent, the big­gest in­tra­day gain sinceMarch 2011.

The com­pany has a mar­ket value of about HK$26.8 bil­lion ($3.5 bil­lion).

Arep­re­sen­ta­tive atCOSCOShip­ping’s me­dia re­la­tions depart­ment said the com­pany wasn’t aware of the bid­ding.

Ever­green Ma­rine’s pres­i­dent and spokesman Lee Mong-jye couldn’t im­me­di­ately be reached at his of­fice for a com­ment.

Rep­re­sen­ta­tives for Ori­ent Over­seas and CMA CGM didn’t im­me­di­ately re­spond to emails seek­ing com­ment.

Asian con­tainer lines, faced with a pro­longed trade slow­down and de­pressed freight rates, are set for fur­ther con­sol­i­da­tion in 2017 as firms con­tinue join­ing forces, the head of Dan­ish in­dus­try be­he­moth AP Moller-Maersk A/S and the chief ofHyundaiMer­chan­tMarine Co have said.

“The in­dus­try has seen a lot of con­sol­i­da­tion and OOCL is among the last few that has a cer­tain scale,” said Rahul Kapoor, a di­rec­tor at Drewry Fi­nan­cial Re­search Ser­vices Ltd in Sin­ga­pore.

Last year saw the col­lapse of South Korea’sHan­jin Ship­ping Co, a mega merger among Ja­panese ri­vals and the sale of Sin­ga­pore’s ship­ping flag­ship, Nep­tune Ori­ent Lines Ltd to CMA CGM.

Anoverly op­ti­mistic ex­pec­ta­tion of a trade re­cov­ery fol­low­ing the 2008-09 global fi­nan­cial cri­sis, prompted ship­ping com­pa­nies to or­der ever-larger vessels, with some stretch­ing longer than the Eif­fel Tower.

As ca­pac­ity piled up, the com­pa­nies tried to un­der-bid each other on freight rates to lure clients, caus­ing ship­ping rates to drop to un­prof­itable lev­els and sink­ing the global con­tainer-ship­ping in­dus­try into losses.

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