On 6th August 2014, COSCO International and China Ocean Shipping Company Americas (“COSCO Americas”) held a share transfer agreement signing ceremony regarding the acquisition of 51% equity interest in Yuan Hua Technical & Supply Corporation (“Yuan Hua”), a wholly owned subsidiary of COSCO Americas, at the headquarters of COSCO Americas in New Jersey, United States. Mr. Liu Hanbo, President of COSCO Americas, and Mr. Xu Zhengjun, Managing Director of COSCO International, signed the agreement on behalf of both signing parties. Mr. Zhang Liang, President of COSCO Hong Kong and Vice Chairman of COSCO International attended and witnessed the signing ceremony. The acquisition marked that COSCO International had initially established the global service network in marine spare parts supply through consolidation of the resources within COSCO Group.

Mr. Xu Zhengjun, Managing Director of COSCO International, said, “COSCO International has been studying the expansion of service network of marine spare parts supply to Europe and Americas for some time. After last year’s successful acquisition of the German company Han Yuan that established a foothold for the supply of marine spare parts in Europe, we believe that the acquisition of Yuan Hua will further enhance the Group’s capability in procuring and supplying of marine equipment and spare parts in the American region, as well as the capability to offer maintenance service to ships in that region. More importantly, it may provide favorable conditions for COSCO International to seek other development opportunities in the Americas, which facilitates its aim to become a global one-stop shipping services provider.”

In this acquisition, Yuantong Marine Service Co. Limited (“Yuantong”), COSCO International’s wholly owned subsidiary, which is mainly engaged in supplying marine equipment and spare parts, acquired 51% of the total issued share capital in Yuan Hua with a consideration of US$472,800 (equivalent to approximately HK$3,668,000). The consideration was determined through arm’s length negotiations between the two parties and shall be settled by Yuantong in cash.

Yuan Hua was registered and incorporated in the State of Delaware, United States. Its principal businesses include material supply for arriving vessels at the port; spare parts supply and delivery; and support for repair service and technical support, as well as other related services for vessels. As at the end of December 2013, the net asset value of Yuan Hua was US$2,096,871, and net profit after taxation and extraordinary items for 2013 was US$66,839.

Completion of the acquisition took place on the date of signing of the share purchase agreement.

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