A model of a container ship belonging to Cosco Shipping is seen in the company’s Singapore office. Cosco Singapore’s subsidiary China Shipyard Group is considering expanding its funding sources and optimising its asset structure, the company said in a statement yesterday.
Bloomberg
Singapore
Cosco Corp Singapore, the shipbuilding arm of China Ocean Shipping Group, is exploring options to support its business as a slump in commodities trading and oil prices leads to sluggish demand for new vessels. The stock surged.
Cosco Singapore’s subsidiary China Shipyard Group Co is considering expanding its funding sources and optimising its asset structure, the company said in a statement yesterday, without providing further details.
The statement came in response to questions from the Singapore exchange as the stock rose for a sixth straight day. The shares jumped 16% to S$0.505 at the close of trade, the highest level since June.
The shipyard expects to report a “significant net loss” in the fourth quarter as a 39% decline in bulk shipping rates has hit demand for new ships and led some customers to cancel existing orders, Cosco Singapore said this month. Customers are asking shipbuilders to defer delivery of offshore drilling rigs amid a slump in oil prices, undermining their earnings.
The Singapore-based company didn’t respond to an e-mail seeking comments. An e-mail and a phone call to Cosco in Beijing weren’t answered.
Shares of Cosco Singapore resumed trading December 14 after being suspended for four months pending an announcement relating to asset reorganisation at its Chinese state-controlled parent.
China’s State-owned Assets Supervision and Administration Commission announced approval December 11 for the reorganisation of China Ocean Shipping Group and China Shipping Group. The move is part of government efforts to shrink industries plagued by overcapacity while creating globally competitive businesses.
