Yangzijiang to take 34% stake in Japanese shipbuilder’s China unit for $152 million
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Yangzijiang said the deal is a “significant” step in strengthening the relationship between both shipbuilding companies.
PHOTO: YANGZIJIANG SHIPBUILDING
Navene Elangovan
SINGAPORE - Mainboard-listed Yangzijiang Shipbuilding is acquiring a 34 per cent stake in a wholly owned subsidiary of Japanese shipyard Tsuneishi Group for 833.1 million yuan (S$152 million).
Announcing the joint venture agreement on Sept 12, the Chinese shipbuilding group said it will purchase the stake in Tsuneishi Group (Zhoushan) Shipbuilding through a private share allotment.
Tsuneishi Group, which was founded in 1903, is primarily in the shipbuilding business. Its business includes the construction of new ships, particularly bulk carriers, and it has the largest repair network in Japan.
Its Chinese subsidiary, Tsuneishi Group (Zhoushan) Shipbuilding, is headquartered in China’s Zhejiang province and focuses on building bulk carriers, container carriers, product tankers and tugboats.
The consideration for the acquisition, which is based on a willing-seller, willing-buyer agreement, reflects Tsuneishi Group (Zhoushan) Shipbuilding’s audited net asset value of 2.5 billion yuan as at Dec 31, 2023.
No external valuation was commissioned, said Yangzijiang.
The consideration will be paid in cash and will be funded from Yangzijiang’s internal resources. Upon completion of the share allotment, Tsuneishi Group (Zhoushan) Shipbuilding will become an associated company of Yangzijiang.
The joint venture agreement is a “significant ” step in strengthening the relationship between both shipbuilding companies, said Yangzijiang.
“This new joint venture (JV) will bring together our strengths in research and development, shipbuilding and supply chains. By combining our expertise, we’ll advance the latest shipbuilding technologies, enhance efficiency and achieve great results together,” said Yangzijiang executive chairman and chief executive officer Ren Letian.
The two companies have previously collaborated in various areas of shipbuilding through their JV in Jiangsu Yangzi-Mitsui Shipbuilding.
Yangzijiang said that the latest JV is expected to deepen their partnership.
Shares of Yangzijiang rose eight cents, or 3.2 per cent, to $2.56 on Sept 13.
THE BUSINESS TIMES
