By Jin Jing (China Daily)
Updated: 2007-08-07 16:27

China International Marine Containers (CIMC), the country's largest shipping container company, yesterday announced that it bought a 42.18 percent stake in Enric Energy Equipment Holdings Ltd for HK$1.13 billion.

It is the first time an A-share company is purchasing an H-share firm. CIMC's share soared to the daily allowable limit to close at 32.12 yuan in yesterday's trading on Shenzhen Stock Exchange.

Mainland-listed CIMC reached an agreement on July 30 to buy 190.7 million shares from Xinao Group International Investment Limited.

The latter originally owned 51.79 percent shares of Enric, through its wholly owned subsidiary Charm Wise Limited, according to the company's statement to the Shanghai Stock Exchange.

The purchase price was HK$5.92 per share, a 27.36 percent discount on Enric's closing price on July 30 at Hong Kong Stock Exchange. CIMC said in the statement that it would make a general offer for all outstanding shares it did not own in the company.

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Analysts said the deal, which was low in purchase price, is expected to expand CIMC's business into gas and energy equipment sector and greatly improve the company's canned transportation production line, after it indirectly acquired 80 percent of Burg Industries BV on July 28.

"The deal is expected to speed up CIMC's industrial structure transition and greatly improve its logistics services to energy end-users," said Huang Dongsheng, an analyst at Changjiang Securities.

"Besides, CIMC already had the competency in cross-regional merger and acquisition, which can ensure the success of the deal," he added.

"Canned transportation should be a major concern for CIMC in the deal. CIMC can be benefited from Enric's rich experience in providing the energy equipment," said Ye Zhigang, an analyst at Haitong Securities.

Tank container is the major means of transporting gases and liquids for oil, chemical and food industries.

"The deal is also expected to provide new sales channel for CIMC, though the amount will not be large," he added.

Enric, a company listed on the Hong Kong Stock Exchange in October 2005, had net assets of 505.52 million yuan at the end of 2006 and sales revenue of 769.65 million yuan.

CIMC's revenue in 2006 was 33.2 billion yuan and its total assets amounted to 23.3 billion yuan.