China Merchants' unit to subscribe for 5.4% in Ningbo Port

China Merchants Holdings (International) Co<144> announced on Tuesday that China Merchants Ningbo, a wholly-owned subsidiary of the company entered into the Promoters Agreement with Ningbo Port Group and the other promoters, to subscribe for 5.4% of the total issued share capital of Ningbo Port at the subscription price of RMB 847 million.

The subscription price of RMB 847 million would be payable in cash by China Merchants Ningbo and will be funded by internal cash resources of the Group, the firm said in a statement filed to the Hong Kong Stock Exchange.

Upon completion of the deal, China Merchants could become the second biggest shareholder in Ningbo Port, the second largest port in China. The majority stake of 90% will be hold by Ningbo Port Group.

Actually, the move mainly aims to help Ningbo Port with its listing plan, an unidentified source with Ningbo Port Group revealed, adding that it expects to float shares prior to the Beijing Olympics.

Cargo throughput in Ningbo Port reached 345 million tons last year, ranking the fourth place in the world.

With the deal, Hong Kong-listed China Merchants thus becomes the only port operator who could simultaneously own China's top two ports.