Keppel T&T sells stake in Hong Kong and Foshan logistics subsidiaries for $39m

The move aims to recycle capital, enabling the company to pursue other opportunities.

Keppel Telecommunications & Transportation (Keppel T&T) has entered into an agreement to relinquish its entire interests in Keppel Logistics Foshan (KLF) and Keppel Logistics Hong Kong (KLHK) to Sinoway Shipping Limited (Sinoway Shipping) for about $39m, according to a press release.

Sinoway Shipping is a freight and cargo transportation service under parent company, Sinotrans Limited.

Keppel T&T will sell 70% interest in KLF to Sinoway Shipping for $34.2m. Sinoway Shipping will also provide $9.4m (RMB 48.5m) to KLF for KLF to repay its shareholders' loan due to Keppel T&T.

Similarly, Keppel T&T’s subsidiary, Steamers (HK) Limited will sell its 70% interest in KLHK to Sinoway Shipping for $5m (RMB25.8m).

Post completion, a special working team will be set up to negotiate with the government on the compensation for the Lanshi port closure. Keppel T&T will be entitled to 70% of the proceeds of the liquidated assets of KLF (which include proceeds attributable to Lanshi port, but exclude proceeds attributable to interests in Sanshui port) after adjustments (including but not limited to for taxes and other necessary costs).

In line with its strategy to provide more flexibility, the company plans to use the regained value and recycled capital to pursue other business opportunities.

The agreement is set to be completed in 2019, and will remove KLF and KLHK as subsidiaries of Keppel T&T.