The closed-door talks on what is believed to be merger discussions between Cosco and China Shipping continue, reports local media.
According to JoC, the Chinese executives of the carriers have been tight lipped on the discussions, but it is widely believed that the lines are thrashing out ways to merge the container and bulk shipping divisions.
Reports say that the Beijing government would like preliminary merger plan within three months, beginning from August. The merger is in line with China's current strategy of consolidation of state-owned enterprises (SOE).
South China Morning Post says that the merger between Cosco Group and China Shipping Group, the country’s two largest shipping conglomerates may not bring much joy.
Cosco and China Shipping have five listed subsidiaries in Hong Kong and six in Shanghai, Shenzhen and Singapore – a situation that makes it more complex than the China CNR-China CSR merger.
The 11 stocks entered a trading suspension en masse from August 10. Three of them are considered flagships, namely China Cosco Holdings, China Shipping Container Lines (CSCL) and China Shipping Development, all of which are A+H dual-listed.
The suspension of shares trading and continuing negotiations prevented the both companies from the recent stock market collapse and from losing market capitalization. The Chinese government officials do not comment on plans for the two holdings, but it is expected the groups to merge their container shipping and dry bulk units.