Chinese Firms Acquires 30% Stake in Terminal No.6 of Kaohsiung Harbor for NT$4.05 B.

Taipei, Dec. 22, 2012 (CENS)--Thanks to the cross-strait bilateral Investment Protection Agreement (IPA), part of the Economic Cooperation Framework Agreement, three Chinese government-linked companies have decided to together spend NT$4.05 billion on acquiring a 10% stake each in the container Terminal No.6 of Kaohsiung Harbor, southern Taiwan.

The three Chinese companies, namely China Ocean Shipping (Group) Company, China Shipping (Group) Company and China Merchants Holdings (International) Co., Ltd., will carry out the investment project via the Hong Kong-based Cheer Dragon Investment Ltd.

The Terminal No.6 is now run by Kao Ming Container Terminal Corp. (KMCT), a container terminal operator fully owned by Yang Ming Marine Transport Corp., one of Taiwan’s largest shipping companies by capacity, on an BOT (build, operate and transfer) basis. According to Yang Ming, 204 million shares of the terminal will be sold to the three Chinese investors at a unit price of US$0.66.

Officials of the Investment Commission under Taiwan’s Ministry of Economic Affairs indicated that the investment is approved officially by the Taiwanese government with the aim to attract more container ships bound for China to Kaohsiung Harbor to boost its container throughput. However, the officials stressed, the three Chinese firms are restricted to either control KMCT or participate in business operations through the stake-buying deal.

Noteworthily, this acquisition is also the biggest investment case launched by Chinese firms seeking cooperation with Taiwanese counterparts in terms of value, after the IPA was signed this August, which has proven effective to enhance bilateral investments across the Taiwan Strait.

Aside from the abovementioned investment case, a couple of Taiwanese banks have also moved to set up branches in China, all of which, however, have yet to be approved by the local competent authority, perhaps due to delayed operations during the country’s transition to new leadership.