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Saturday, May 11, 2019 11:26:42 AM
US security concerns force Cosco-owned Orient Overseas to sell Long Beach port in California
30 Apr, 2019
Sale of Hong Kong-based firm that had run the terminal for three decades to Chinese state-owned Cosco in 2017 raised concerns among US security agencies
A Hong Kong-based company has been forced to sell its American container port after the US government raised security concerns about its parent being a Chinese state-owned shipping giant.
Orient Overseas (International), which is majority-owned by Cosco Shipping Holdings, will sell off its entire interest in Long Beach Container Terminal in California for US$1.78 billion (HK$13.97 billion) in cash, according to a stock exchange filing on Tuesday morning.
The sale to a US infrastructure fund is the fulfilment of a national security agreement signed last year and is expected to net OOIL a profit of US$1.29 billion (HK$10.15 billion), the company said in the announcement.
OOIL, founded as a shipping and logistics business in 1969 by the family of former Hong Kong Chief Executive Tung Chee-hwa, has owned the Long Beach port for more than three decades.
But its sale to Cosco in July 2017 for HK$49.23 billion raised a red flag with US security agencies, which were unhappy with the idea of a state-owned firm taking indirect ownership of a major port. Cosco now owns 75 per cent of OOIL.
After lengthy negotiations, OOIL and Cosco signed the agreement with the US Departments of Homeland Security and jJustice, promising to sell the terminals to “a suitable, unrelated third party” deemed “acceptable” to the US department.
https://www.scmp.com/business/companies/article/3008324/us-security-concerns-force-cosco-owned-orient-overseas-sell-long
30 Apr, 2019
Sale of Hong Kong-based firm that had run the terminal for three decades to Chinese state-owned Cosco in 2017 raised concerns among US security agencies
A Hong Kong-based company has been forced to sell its American container port after the US government raised security concerns about its parent being a Chinese state-owned shipping giant.
Orient Overseas (International), which is majority-owned by Cosco Shipping Holdings, will sell off its entire interest in Long Beach Container Terminal in California for US$1.78 billion (HK$13.97 billion) in cash, according to a stock exchange filing on Tuesday morning.
The sale to a US infrastructure fund is the fulfilment of a national security agreement signed last year and is expected to net OOIL a profit of US$1.29 billion (HK$10.15 billion), the company said in the announcement.
OOIL, founded as a shipping and logistics business in 1969 by the family of former Hong Kong Chief Executive Tung Chee-hwa, has owned the Long Beach port for more than three decades.
But its sale to Cosco in July 2017 for HK$49.23 billion raised a red flag with US security agencies, which were unhappy with the idea of a state-owned firm taking indirect ownership of a major port. Cosco now owns 75 per cent of OOIL.
After lengthy negotiations, OOIL and Cosco signed the agreement with the US Departments of Homeland Security and jJustice, promising to sell the terminals to “a suitable, unrelated third party” deemed “acceptable” to the US department.
https://www.scmp.com/business/companies/article/3008324/us-security-concerns-force-cosco-owned-orient-overseas-sell-long
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