Chinese logistics group to join the development of Sri Lanka’s Hambantota Port
In relation to the development of Sri Lanka’s southern Hambantota Port, China’s CMPorts has reportedly said that a Chinese based logistics group is to take an indirect stake to join in the development programme.
The move is expected to bring in new industries from China’s Fujian province to Sri Lanka.
Accordingly, Fujian Provincial Communication Transportation Group Co., Ltd (FJCT) is to take a 23 percent stake in Gainpro Resources Limited, which is a British Virgin Islands company that holds CM Ports’ 85 percent stake of Hambantota Port International Group, the operating company of the port.
“FJCT will take this cooperation as an opportunity to deepen the cooperation between Hambantota port and Fujian ports as well as shipping enterprises,” Li Xinghu, Chairman of FJCT has said in a statement issued to the media.
“At the same time, FJCT will also strive to attract and encourage Fujian enterprises to participate in the construction of Hambantota port, and strive to make Hambantota Port a homebase for Fujian enterprises to enter the South Asia and overseas markets.”
FJCT will pay US$ 268 million to take a 23.52 percent stake in Gainpro Resources through a special purpose vehicle, Fujian Transportation Maritime Silk Road Investment and Management Co. Limited (Fujian TMSR) and appoint directors to HIPG.
The money will be used to reduce CM Port debt. Gainpro has a US$ 976 million shareholder loan from the parent. CMPorts has paid Sri Lanka US$ 976 million to take an 85 percent stake in HIPG.
OSL take:
Sri Lankan authorities are working tirelessly towards achieving maritime hub status for the island. Sri Lanka’s geographical positioning in the Indian Ocean, ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country have helped the island become a business hub in the South Asian region. These facts have also given the country a strong footing to stake a claim for the position of maritime hub in the Indian Ocean. Sri Lanka plays a prominent role in China’s Belt and Road Initiative, which has resulted in a high level of Chinese interest in the country. Many Chinese businesses are engaged in business endeavours in Sri Lanka. Foreign businesses/investors could therefore confidently explore business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/15072020/Z_1 |