Feb. 22, 2012 (China Knowledge) - China Merchants Energy Shipping Co Ltd<601872
>, the country's largest oil tanker operator by volume, has received approval from the China Securities Regulatory Commission
to issue up to RMB 2.89 billion via a private placement.
In a statement, the Shanghai-listed
firm said it will issue not more than 858 million new shares at a price of RMB 3.37 apiece to three selected investors.
Sinopec Group, the parent co of Sinopec<600028
>, Asia's largest oil refiner, will subscribe 490 million of the to-be-issued shares, while China Life Insurance Co Ltd<601628
> 210 million shares and a unit of Sinochem Group 150 million shares.
Proceeds from the issue will be used to purchase ten very-large crude carriers or VLCCs, which are expected to cost a combined RMB 5.56 billion. The balance should be made up from bank loans the issuer would acquire from the overseas lenders.
Li Jianhong, chairman of China Merchants Energy Shipping, said current cost for one VLCC is about US$90 million, 37% less than a high price in September 2008.
In the first half of 2011, the issuer's net profit attributable to shareholders plunged 54.94% from a year earlier to RMB 199 million.