Chinese Port Operator Xinghua’s Owner Explores Sale

(Bloomberg) -- Xinghua Port Holdings Ltd.’s controlling shareholder is exploring a sale of his majority stake in the Chinese logistics operator, people with knowledge of the matter said.

Chairman Patrick Ng’s family is working with an adviser to gauge interest in the Hong Kong-listed company, according to the people, who asked not to be identified because the information is private. The controlling shareholder has reached out to potential buyers including state-owned Shenzhen International Holdings Ltd. and Zhuhai Port Co., the people said.

A deal could value Xinghua Port at about $200 million including debt, the people said. Ng and his family own nearly 61% of the company, according to its 2019 annual report.

Shares of Xinghua Port climbed as much as 9.8% following the Bloomberg News report. They have risen about 7% year to date, giving the Singapore-based company an enterprise value of about $187 million. There’s no certainty the potential bidders will proceed with offers, and Ng could still decide to keep his stake, according to the people.

A representative for Singapore-based Xinghua Port declined to comment. Ng could not be reached for comment. Representatives for Shenzhen International and Zhuhai Port didn’t respond to requests for comment.

Xinghua Port was previously a unit of Pan-United Corp. It was later separated from the rest of Pan-United and started trading in Hong Kong in 2018 by way of introduction, a method that allows a company to become listed without issuing new stock.

Xinghua Port operates two multipurpose ports that have 16 berths in Changshu, a city in Jiangsu province just upriver from Shanghai, according to the company’s website. The ports can accommodate vessels up to 85,000 deadweight tonnage. The port operator posted net income of 78.6 million yuan ($11.1 million) in 2019, up from 50.7 million yuan in the previous year.

Fallout from the coronavirus outbreak has severely impacted shipping operations around the world, with bulging warehouses prompting companies to delay or cancel sailings. The chairman of the International Chamber of Shipping industry group estimated in April that global container shipments could fall as much as 30% in the coming months.

©2020 Bloomberg L.P.

With assistance from Bloomberg