China Merchants and COSCO move to exit Qingdao ore terminal

China Merchants Port and COSCO Shipping Ports are joining forces with IMC to sell a controlling stake in an iron ore terminal at China’s Qingdao port, setting a minimum price of CNY1.92bn ($287m).

The three shareholders have launched a public tender for their combined 70% holding in Qingdao Port Dongjiakou Ore Terminal, according to Hong Kong stock exchange disclosures.

China Merchants Port and COSCO Shipping Ports each hold 25% of the terminal company, while Singapore-based IMC owns another 20%. Qingdao Port International retains the remaining 30%.

The stakes are being offered as a single package through the China Beijing Equity Exchange, with bidding open until November 11. The minimum consideration has been set at $287m, including $102m apiece for the holdings of China Merchants and COSCO.

The terminal company is responsible for the construction, operation and management of iron ore handling facilities at Dongjiakou, one of Qingdao’s main bulk cargo areas.

Dongjiakou has been developed to accommodate some of the world’s largest ore carriers. Its 400,000 dwt iron ore terminal entered service in 2013, giving the port the ability to receive very large ore carriers employed in trades between Brazil and China.

China Merchants Port said the proposed sale would allow it to realise the value of its investment and improve its financial flexibility.

COSCO Shipping Ports separately described the disposal as part of its wider strategy to optimise resource allocation and support future business development.

If completed, the transaction would see all three selling shareholders exit the terminal company, leaving the successful bidder with a majority holding alongside Qingdao Port International.

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