China Merchants Holdings International Co, the port arm of China's communications ministry, will sell five toll roads in China for US$336.5 million to a Singapore company, which will become a unit.
Singapore-listed China Merchants Holdings Pacific Ltd, which develops residential property, will finance the acquisition with new shares, convertible preference shares and its one-third stake in a Shenzhen port in southern China, the company said in a statement on the stock exchange Website.
China Merchants International will boost its stake in China Merchants Pacific to 72 percent from 24 percent, making the Singapore-listed company a unit.
The sale of the five toll roads, which had 122 million Hong Kong dollars (US$15.6 million) net profit last year, will enable Hong Kong-listed China Merchant International to focus on its ports business, the statement said. The company last month agreed to sell its seven tanker vessels to its parent for HK$1.31 billion.
Shareholders of China Merchant Pacific will receive a special dividend of 2 Singapore cents per share after the acquisition. The new shares to be issued will not be entitled to the dividend, the statement said. The acquisition will boost total assets of China Merchant Pacific to more than 700 million Singapore dollars (US$414 million), it said.
Three of the roads to be sold are located in Guizhou, Guangdong Province, and the Guangxi region in southern China. The other two are located in Zhejiang Province in eastern China.
China Merchants International reported first-half profit rose 34 percent to HK$831.6 million.