Cosco says it will order 16 ships

CHINA Cosco Holdings Ltd, Asia's largest container-shipping line, said it is ordering 16 vessels for US$1.08 billion to meet rising demand, according to Bloomberg News.

The company will ask Jiangsu Tianyuan Marine Import & Export Co and Jiangsu New Yangzi Shipbuilding Co to build the vessels, according to a statement filed to the Hong Kong Stock Exchange on Monday. The vessels will have a capacity for carrying 4,250 standard 20-foot-containers each, the statement said.

China Cosco, based in Tianjin, forecast on December 20 that its 2007 profit will probably jump nine-fold to 18 billion yuan (US$2.46 billion) on higher demand for shipping services in the world's fastest-growing economy. The company's shares, traded in Shanghai and Hong Kong, have surged five-fold last year.

According to its current market forecast, global demand for container shipping services will continue to grow in the next few years, the company said. China Cosco will borrow from banks to finance 80 percent of the cost and cover the remainder from internal resources, the company said.

403 percent

China Cosco's Shanghai-listed shares, which fell 1.9 percent to 42.66 yuan on Monday, have jumped 403 percent since they started trading in June. The company's Hong Kong-traded stock, which gained 389 percent last year, fell 0.5 percent to HK$21.55 (US$2.76).

China Cosco will take delivery of seven of the vessels in 2011 and the remainder in 2012, it said. The company has an option to order four more vessels, according to the statement.