CIMC Enric returns for second attempt at acquiring SOE


CIMC Enric has returned to the negotiation table in a second attempt at buying distressed Sinopacific Offshore & Engineering (SOE), after the first attempted deal fell through last year.

CIMC Enric, affiliate of China International Marine Containers (CIMC), has proposed to acquire bankrupt SOE, subsidiary of Sinopacific Shipbuilding Group, at a price of RMB799.8m ($119.9m).

SOE is currently under receivership and CIMC Enric is qualified as a restructuring investor to help restructure SOE.

Hong Kong-listed CIMC Enric said the buyout offer and restructuring plan are subject to the approval of SOE’s creditors and the Chinese court.

In June 2016, the proposed acquisition deal broke down with CIMC Enric saying that the entire equity interests of SOE have been seized by the Chinese courts and therefore not free from encumbrances and disputes, leading to certain terms of the purchase deal unable to be fulfilled.

The earlier acquisition attempt saw CIMC Enric provided financial assistance to SOE in the amoount of RMB1.48bn, leading to CIMB Enric having to make a provision for impairment of RMB1.18bn for the botched deal.

However, a certain portion of the amount will be written off upon the latest approval and implementation of SOE’s restructuring plan.

SOE has a track record in the design and manufacture of IMO type C tank, and manufacturing of liquid cargo handling system for LNG and LPG carriers, as well as production of marine oil and gas module.

“The board believes that LNG marine storage and transport industry and marine oil and gas module industry will remain bullish in the long term,” CIMC Enric stated.

“In line with the company’s development strategy to expand in the value chain for natural gas equipment and services from onshore to offshore and from downstream to upstream, the acquisition will facilitate the company in building its integrated capabilities for purification, liquefaction, storage and transportation of natural gas both onshore and offshore,” it added.

“As there are limited number of companies in China operating similar business with the assets as the target company [SOE], the acquisition provides a good opportunity to the company,” CIMC Enric explained.

Source: Lee Hong Liang, Asia Correspondent, Seatrade Maritime

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