Global Logistic Properties (GLP) will acquire a 19.9-per-cent stake in Shenzhen Chiwan Petroleum Supply Base, for $91 million, in a move that will strengthen its market position in China.
GLP, a unit of the Government of Singapore Investment Corp, said the stake would be acquired through its subsidiary, China Logistics Holding.
The subsidiary has entered into an agreement to buy 45.89 million shares for HK$11.75 ($1.98) each, with Offshore Joint Services (Bases) Company of Singapore, a joint venture between Singapore’s JTC Corp and Australia’s Toll Holdings.
In a filing with the Singapore Exchange, GLP said the acquisition would be funded by proceeds from its October initial public offering.
The IPO, Singapore’s second largest, raised $3.9 billion in gross proceeds.
Shenzhen Chiwan Petroleum Supply Base is the parent company of BLOGIS, which owns 12 projects in eight logistics hubs in China, making it the second largest provider of modern logistics facilities in the world’s No 2 economy, behind GLP.
GLP chief executive, Mr Ming Z Mei, said: “In terms of location, the BLOGIS portfolio complements the GLP portfolio well, allowing us to strengthen our presence in strategic markets that the group is already in, and opening doors for GLP in markets that the group has not entered into, such as Wuhan and Zhengzhou.”
He said GLP would leverage on BLOGIS’ strong land sourcing abilities and BLOGIS would have the opportunity to capitalise on GLP’s strong capital and customer base.
Shenzhen Chiwan Petroleum Supply Base has two other major businesses: Offshore Petroleum Logistics and Offshore Engineering.
Offshore Petroleum Logistics provides warehousing and logistics services in an offshore environment to complement GLP’s core business.
Offshore Engineering owns stakes in two companies, along with strategic partners such as China National Offshore Oil Company and Sembawang Marine Offshore Engineering that offer integrated offshore engineering and construction services to the many offshore oil rigs, floating production storage and offloading vessels and oil tankers around China.
“Although the initial NAV/earnings impact does not look significant, we believe their cooperation should help the combined group dominate their market share in China,” said Citigroup, which has a “Buy” call and a $2.80 target price on GLP.
The stock ended yesterday down 0.9 per cent at $2.16.
Source : Today – 24 Dec 2010