Bank of China Signs $14b Deal With China Shipping
Bank of China and China Shipping Group (CSG ) signed a global strategic cooperation agreement worth $14 billion (RMB90bln) in Beijing yesterday to develop cooperation opportunities worldwide, especially in the Shanghai Free Trade Zone (FTZ).
According to the agreement, both parties will enhance co-operation in loans and cash management, direct financing, financial consulting, investment and insurance. This collaboration is a move to implement China's 'One Belt and One Road' initiative, which aims to link China with Africa, Europe and Southeast Asia for common development.
The move was a result of a recent state initiative to promote the development of the maritime industry, CSG said.
China Shipping and Bank of China have a long history of co-operation, and the bank has provided loans, credit lines as well as guarantee for the bonds issued by China Shipping.
Currently, Bank of China is the seventh largest bank in terms of ship financing in the world, says its officials.
Established in 1997, China Shipping Group owns and operates around 500 ships with a total capacity of 30m dwt.
China Shipping Container Liners (CSCL), China Shipping's listed container subsidiary, predicted that it would return to the black with CNY1.0Bn ($159M) profits for 2014 on asset disposals, cost cuts and improvement in operations.
China Shipping Development (CSDC), a bulk shipping arm of China Shipping Group, would return to the black in 2014 with about CNY300M ($48M) in profits on government subsidies for ordering new vessels to replace old tonnage.
