On 10th June 2013, Yuantong Marine Service Co. Limited (“Yuantong”), COSCO International’s wholly owned subsidiary mainly engaged in supplying marine equipment and spare parts, signed a share purchase agreement with COSCO Europe GmbH (“COSCO Europe”) in relation to the acquisition of the entire issued share capital of its wholly-owned subsidiary, Hanyuan Technical Service Center GmbH (“Hanyuan”). The consideration of the acquisition amounted to EUR1,180,000 (equivalent to approximately HK$11,977,000). Upon completion of the acquisition, Hanyuan will officially become the first wholly owned subsidiary of COSCO International in Europe, which marks a crucial step to expand its global presence of supply services of marine equipment and spare parts outside Asia.

Mr. Xu Zhengjun, Managing Director of COSCO International, said, “Germany is a global hub for suppliers of marine equipment and spare parts, and Hamburg is one of the most important ports in Europe. The incorporation of Hanyuan into the global business network of Yuantong will further enhance the capability of Yuantong in the procurement and supply of marine equipment and spare parts in Europe, and increase its maintenance service ability for the vessels travelling in that region. More importantly, the acquisition of Hanyuan will lay a foundation for Yuantong as well as COSCO International to seek other development opportunities in that region in the future.”

Hanyuan was established in Hamburg, Germany in 1981, and became wholly-owned by COSCO Europe in 1993. Its major businesses include providing trading of marine equipment and spare parts, services such as maintenance, installment, testing and after sales services for ships, as well as technical and commercial consultancy for ship maintenance. As at the end of 2012, the net asset value of Hanyuan was EUR509,582 and the net profit for the year 2012 was EUR407,000.

On 18th March this year, Yuantong and COSCO Europe signed a memorandum of the acquisition of Hanyuan. The consideration of the acquisition was determined through arm’s length negotiations between the two parties, who took into account of Hanyuan’s past performance and its appraised value as at the end of 2012. The consideration shall be funded by internal resources of Yuantong in cash.

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