Negotiations to merge both Chinese national shipping lines Cosco and China Shipping looks to take far more time than initially projected final merger news will be revealed within the next month.
As a result thereof both Chinese carriers have suspended the trading of their shares at the stock market since early August.
China Cosco Holdings, the Hong Kong-listed flagship of China’s largest maritime conglomerate, stated their shares would remain suspended for no more than one more month. Saying the event concerned is “relatively complicated” and “asset reorganization may be involved”, Cosco disclosed the transaction proposal still needed to be discussed with intermediaries and regulatory authorities.
Both China Shipping and Cosco said in their releases that a further update would be released next week.
According to inside info a five-man team has been working up integration proposals for the last two months with a view to presenting merger possibilities to authorities in Beijing soon. The five man team would consist of three China Shipping and two Cosco directors. The plan is to get the merger complete by as early as 2017.
Were it to go through, the combined entity would become the world’s largest shipping line by quite some distance. With 783 vessels worth us dollar 22.95 billian , the Chinese giant would be more than us dollar 10 billion and 500 ships in front of second placed AP Moller Maersk. It would rank number one in the dry bulk and tanker trades in terms of fleet size and valuation and would be number two in the liner trades.