Yangzijiang acquires remaining 20% stake in Xinfu Yard

The transaction is set at S$136.88m and is fully funded by 100 million treasury sales.

Yangzijiang Shipbuilding (Holdings) Ltd. (Yangzijiang or the Group) signed a sale and purchase agreement with Sanfu Shipbuilding Holdings for the purchase of the remaining 20% equity stake in Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. (Xinfu Yard) for S$136.88m (RMB650m).

This will be fully funded by 100 million treasury shares (consideration shares) of the Group, Yangzijian said in a release on Wednesday.

With the transaction, Xinfu Yard, which is involved in shipbuilding, production, and processing of large-scale steel structures and is one of the Group’s major shipyards, will be a fully-owned subsidiary of Yangzijiang. All profits attributable to record shipbuilding orders placed with the Group will accrue to the Group’s bottom line.

Before the transaction, Yangzijian and its wholly-owned subsidiary, Jiangsu New Yangzin Shipbuilding Co., Ltd., owned 12.5% and 67.5%, respectively, of the issued share capital of Xinfu Yard, it said.

“The further acquisition signifies a huge investment in one of Yangzijiang’s key business units and in our existing major shipyard. The acquisition is also expected to be earnings accretive for the Group and is part of our continuous efforts to enhance long-term growth prospects and shareholder value,” Ren Letian, executive chairman and CEO of the group, said.

Yangzijiang said the transfer price for each consideration share of S$1.37 (RMB6.5) “represents a 0.63% premium to the volume-weighted average share price of S$1.3614 on 21 July 2021,” the full market day when the agreement was signed.