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Significant Progress in Implementing COSCO SHIPPING Holdings’ Offer to Acquire OOIL

Date:2018-07-08 Read times: font size:[ L M S ]

(8 July 2018) - COSCO SHIPPING Holdings Co., Ltd. (“COSCO SHIPPING Holdings” or “the Company”) (SSE: 601919; HKEx: 1919), a listed subsidiary of China COSCO SHIPPING Corporation, made an announcement that the Committee on Foreign Investment in the United States (“CFIUS”) has determined that there are no unresolved national security issues related to its offer to acquire Orient Overseas (International) Limited (“OOIL”, HKEx: 316). 
For CFIUS purposes, Faulkner Global (a-wholly owned subsidiary of COSCO SHIPPING Holdings) and OOIL have entered into the National Security Agreement with the Department of Homeland Security and the Department of Justice of the U.S., pursuant to which they have committed to the sale of the entities owned by OOIL (“LBCT Entities”) which operate the Long Beach Container Terminal in the U.S. to an unrelated third party. Pending the sale, the ownership of the LBCT Entities will be transferred to a U.S. trust, under which OOIL is the beneficiary. The parties have received a letter from CFIUS dated 6 July 2018 stating that, in light of the National Security Agreement, CFIUS has determined that there are no unresolved national security issues related to the offer to acquire OOIL. 
In order to keep pace with the development trend of the shipping industry and achieve long-term sustainable development, COSCO SHIPPING Holdings announced on 9 July 2017 that its wholly-owned subsidiary, Faulkner Global, together with Shanghai Port Group (BVI), have made an offer to all shareholders of OOIL for the acquisition of OOIL shares. Upon completion of the acquisition, COSCO SHIPPING Holdings’ leading position in the global container shipping industry will be reinforced and its operating scale will be further expanded. Moreover, greater synergies between its subsidiary, COSCO SHIPPING Lines, and OOIL can be achieved and their profitability will be increased through the enhancement of operational efficiency, thus enabling rapid development to be achieved. 
On 29 June 2018, COSCO SHIPPING Holdings received the decision from the Anti-Monopoly Bureau of the State Administration for Market Regulation of the PRC not to prohibit its offer to acquire OOIL. Accordingly, all pre-conditions to the offer were fulfilled. The composite document relating to the offer was dispatched to the shareholders of OOIL on 6 July 2018, pursuant to which Faulkner Global and Shanghai Port Group (BVI) formally made the offer to all OOIL shareholders to acquire OOIL shares at the offer price is HK$78.67 per share, and the closing date for the acceptance of the offer is 27 July 2018. 
On 6 July 2018, COSCO SHIPPING Holdings made an announcement that, in order to maintain OOIL’s listing status after the transaction, Faulkner Global has entered into agreements with PSD Investco, Crest Apex and Rongshi International for the sale of OOIL shares. Pursuant to the agreements, if the public float of OOIL shares falls below 25% upon completion of the offer, Faulkner Global will sell up to 15.1% of OOIL’s issued shares to the aforementioned investors. PSD Investco, Crest Apex and Rongshi International will acquire up to 7.73%, 4.99% and 2.38% of equity interests in OOIL respectively. The entry of the above sale and purchase agreements will enable OOIL to expand its shareholder base and facilitate its sustainable and healthy business development.

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