China Merchants Holdings (International) Company Limited, has announced that it has signed a share subscription agreement with Dalian Port (PDA) Co., under which Dalian Port will issue 1.1bn new shares to China Merchants for HK$4.3bn ($554m).
Upon completion of the transaction, China Merchants will hold a 21.05% equity stake of Dalian Port, becoming the second largest shareholder.
China Merchants Holdings, which will become Dalian Port's second-largest shareholder after the purchase, said the deal allows it to strengthen its ports network within China and enhance its port-service network.
China Merchant said it has been striving to further strengthen its ports network within China, taking advantage of the latest policy adopted by the Chinese government to encourage restructuring among state-owned enterprises’ groups.
Being one of the flagship enterprises in the port industry in Liaoning province, Dalian Port has global leading ports infrastructure, operational technology and management, and is situated in a superior geographical location.
Dalian Port also has a wide range of dedicated ports, including a 450,000-tonne crude oil terminal, which is currently the world's largest, a 400,000-tonne ore terminal, a global leading container terminal that could accommodate mega vessels, and an automobile terminal, which handled 68.5% of the imported crude oil, 96.7% of international containers and 100% of foreign traded vehicles in North-eastern China.
Dalian Port said it will use 25% of the funds to develop its oil business, 35% for port asset investment and integration and 20% for upgrading port facilities.
There are currently 88 international shipping routes and 13 international direct lines calling at Dalian Port, covering and connecting to more than 160 countries and 300 terminals around the world.