China Ocean Industry Group (COIG), which engages primarily in shipbuilding business, has continued to invest in intelligence parking facilities in China, expanding its reach in the car parking and automotive device businesses.
COIG, via its indirect wholly-owned China Ocean Logistics, entered into an investment agreement on Tuesday with Zhongguan Hongan and Shougang Lujie for the establishment of NewCo to invest in intelligent parking management and value-added parking management services.
COIG will contribute RMB20.65m ($3.14m) to take 45.89% stake in NewCo, while Zhongguan Hongan and Shougang Lujie will contribute RMB24.35m in total to own the remaining shares.
Zhongguan Hongan’s main business is in the operation and management of intelligent parking systems, while Shougang Lujie, owned by state-run Shougang Corporation, is involved in investment and management of infrastructure, high technology and new energy projects.
Over the past six months, COIG has been diversifying into the car parking business by investing inShandong Ruitong (Hong Kong) Parking Management Services Co and forming a joint venture with Zhongan Anchan Technology Development.
“In view of the favourable policies promulgated by the PRC authorities to support and encourage the car parking industry, the directors are of the view that the group should expand its car parking business to grasp the growing market,” COIG said.
The move into the car parking industry is also due to the prolonged challenging operating environment in the shipbuilding sector, marked by widespread bankruptcy of shipyards impacted by dearth of shipbuilding orders, tight cashflow, contract defaults and rising costs.
COIG had also changed its name from the previous China Ocean Shipbuilding Industry to better reflect the company’s future business development.