CMPort duly passed two land purchasing resolutions
28 November, an extraordinary general meeting (EGM) of the shareholders of China Merchants Port Holdings Company Limited (CMPort) was held in Hong Kong, in the purpose of voting for the acquisition of the Qianhaiwan Property equity resolution and the purchase of the Jetty III land in Shekou Container Terminal(SCT) resolution. The meeting was hosted by Mr. Bai Jingtao, Managing Director of CMPort, Executive Director and Deputy General Manager Mr. Wang Zhixian and Mr. Zheng Shaoping, Chief Financial Officer Mr. Lu Shengzhou, other Non-executive Directors and representatives of Shareholders also attended the meeting.
With more than 90% of the votes were cast in favor of both resolutions, the resolutions proposed at the EGM were duly passed as ordinary resolutions.
The total area of Qianhaiwan Garden is 52 thousand square meters. China Merchants Port Development (Shenzhen) Company Limited (a limited liability company incorporated in the PRC and an indirect wholly-owned subsidiary of CMPort) is going to acquire 100% equity interest of Shenzhen China Merchants Qianhaiwan Property Company Limited from China Merchants Shekou Industrial Zone Holdings Company Limited (CMSIZ) and its subsidiaries, with a total consideration of RMB 2,528 million. The Qianhaiwan Garden is strategically located in the Qianhai Special Economic Zone, and is expected to be utilized as staff quarters for CMPort. The remainder will be used for retail and commercial purposes and other ancillary community supportfunctions. The acquisition aforementioned aims to support the overall development of the ports business of CMPort in the West Shenzhen Port Zone.
SCT Jetty III land, with a total area of 204 thousand square meters and estimated consideration of RMB 651million,is where buildings and facilities such as SCT’s office tower, custom building, as well as the north gate are located. CMPort has been renting the according area from CMSIZ since 1989, and the rental agreement will end in 2018. The passing of the resolution helps CMPort to better control of its rental cost by lowering the uncertainties in relation to future rental payment.
After the meeting, CMPort's Managing Director Mr. Bai Jingtao and Chief Financial Officer Mr. Lu Shengzhou was interviewed by journalists. Bai Jingtao says, through cost reduction and increasing service efficiency, as well as strengthening communication with customers, the container throughput of CMPort in 2016 third quarter has increased compared with the same period last year, and the overall performance of the second half of the year is expected to be better than the first.
Bai Jingtao stated, the depreciation of RMB benefits China's export, the business volume and revenue of CMPort is expect to increase accordingly. At the same time, CMPort has also taken financial and capital operation acts to reduce exchange rate risk. Moreover, Hanjin Shipping issue has limited effect on CMPort's overall business, both legal and operation measures has been taken to reduce losses.
Concerning the future port acquisition, Lu Shengzhou says that a RMB 1.5 billion short-term notes was issued in November, to be deployed as capital expenditure in China, which includes the resolutions as mentioned. CMPort has smooth access to various source of financing when there is potential mergers and acquisitions in the future. Bai Jingtao states, the major use of the capital expenditure mentioned is for ports acquisition and to increase equity stake with an aim to achieve major control in existing assets. In the future, CMPort will focus on port merger, acquisition and integration in Bohai Rim in North China, as well as in Pearl River Delta Region, while at the same time, strengthen port cooperation in the Yangtze River Delta region.
