Cosco Shipping Energy Transportation (CSET) is set to raise CNY 8bn ($1.1bn) to buy 11 vessels — six VLCCs, two LNG carriers and three aframax crude carriers.
The Shanghai-listed company will issue more than 1.4m ‘A’ shares, it said in a Hong Kong Stock Exchange filing.
‘A’ shares are usually listed on the Shanghai Stock Exchange.
Chinese maritime giant Cosco Shipping will scoop up 50% of the shares, with the rest made available to 34 other target subscribers.
The VLCCs and LNG carrier newbuildings would be constructed at Dalian Shipbuilding, TradeWinds’ research revealed.
In November, TradeWinds reported CSET’s Hainan unit had booked six VLCCs at Dalian Shipbuilding.
The order cost CNY 5.75bn, of which CNY 4.59bn, or 80%, will be paid for by the ‘A’ share listing, according to the filing.
Proceeds raised will also go to fund two LNG newbuildings, which will cost about CNY 3.43bn, of which CNY 2.75bn, or 80%, will be funded by the ‘A’ share listing.
VesselsValue data indicates that the pair of 83,300-dwt LNG newbuildings would also be constructed at Dalian Shipbuilding.
In January last year, TradeWinds reported CSET Hainan would be buying a trio of 114,200-dwt aframaxes for CNY 1.74bn, or $81.8m each.
About 37.7%, or CNY 65.5m, of the order will be paid for via the ‘A’ share listing, according to the filing.
The aframaxes will be delivered in December 2026 and September and November 2027 and will be built at Cosco Shipping Heavy Industries (Yangzhou).
Tankers in demand
CSET attributed a rise in demand for tankers, brought about by changes in crude shipping routes, as its main reason for fleet building.
Factors that remodelled crude routes included “exacerbated geopolitical tensions” such as the Russia-Ukraine conflict, the Red Sea crisis, production cuts maintained by Opec nations and increasing output from the Americas, including Brazil and Guyana.
These factors also caused shipping distances to be extended.
As such, CSET wants to “reinforce both domestic and overseas oil shipping strengths amid the continuous prosperity cycle of the oil shipping industry”.
Explaining the LNG newbuildings order, CSET said “China’s LNG import is expected to increase in the long term” and the company plans to enlarge its LNG shipping capacity “in response to carbon peaking and carbon neutrality”.
Earlier this month, CSET said it expects net profit to jump 17.2% from the CNY 3.38bn reported for 2023 to CNY 3.96bn in 2024.
CSET shares closed at CNY 12.25 today, about 3.6% down, or CNY 0.46, down from Friday’s close of CNY 12.71.(Copyright)
