China’s two shipping giants China Merchants Energy Shipping Co Ltd (CMES) and Sinotrans & CSC Holdings are setting up a USD 1.1. billion joint venture aimed at boosting the country’s crude importing capacity, CMES said in a filing to Shanghai stock exchange.
Under the deal, CMES will have the majority stake in the very large crude carrier (VLCC) venture, and will assign to the deal nine of its existing supertankers and 10 VLCC newbuilds under contract, along with USD 566 million in cash.
On the other hand, Sinotrans & CSC will provide USD 544 million in cash.
In addition, the venture will add more ships to its fleet, either second hand or newbuilds, as it targets creation of one of the world’s leading tanker fleet so as to meet the country’s rising oil import demand.
The deal is set for completion by the end of September.
CMES currently operates 17 VLCCs with a total capacity of 3.71m dwt. Sinotrans & CSC’s oil shipping arm, Nanjing Tanker, delisted from the stock exchange this year and is undergoing restructuring at the moment.
[mappress] World Maritime News Staff, August 12, 2014; Image: CMES