Cosco’s share price crashes after much-awaited restructuring deal comes to nothing

It has resumed trading after four months of suspension.

COSCO Corporation (Singapore) took a beating after its shares resumed trading on Monday, December 14. Investors punished the shipping company after a much-awaited privatisation deal with its parent company fell through last week.

COSCO shares have been suspended from trading since August 11, after it was reported that its majority shareholder Cosco Group is eyeing a privatisation exercise for the struggling shipping company. Prior to the revelation of the proposed restructuring deal, COSCO reported consecutive quarters of widening losses and saw its share price fall to its lowest level in ten years.

On December 11, COSCO Singapore was left out of the deal after COSCO Group revealed a wide-ranging restructuring deal that involves its Shanghai-listed subsidiaries China Shipping Development, China Shipping Container Lines, and Hong-Kong listed COSCO Pacific.

"The present stage of the reorganisation will involve mainly the container shipping, ship leasing, tanker shipping, bulk shipping, financial businesses and other sectors carried out by certain other companies within the COSCO Group. It will not involve the Company’s business segments for the time being," COSCO Singapore said in a filing with the SGX.

As of 10:00am on December 14, COSCO Singapore's share price has dropped 13.3% to $0.325 cents per share.