OOIL sells property unit for $2.2 billion
Hong Kong-based liner carrier OOCL's parent company said Tuesday it is selling off its property development division to a Chinese property developer for $2.2 billion in cash.
Orient Overseas (International) Ltd., said the move came as a result of a strategic review of its business.
The buyer is CapitaLand China Holdings Co. Ltd., which won in a competitive bidding process. OOIL didn't release details about other interested parties.
'The transaction represents the culmination of a lengthy strategic review of our property development and investment business,' OOIL chairman C.C. Tung said in a statement. 'We are very pleased with the outcome of the transaction and believe that it will strengthen the position of our remaining core business.
'We believe CapitaLand, as one of Asia's leading developers, will do an outstanding job completing the development of our portfolio of projects and we look forward to working with them to ensure a smooth transition and integration.'
The property division, called Orient Overseas Development Ltd., is a wholly owned subsidiary of OOIL and conducts property development and investment with a primary focus on opportunities in the Greater Shanghai area and Tianjin. Its projects include residential, commercial, retail and hotel developments.
OOIL said its book value as of Dec. 31 was $1.15 billion.
'OOIL intends to use the sale proceeds from the transaction for general working capital purposes and to fund growth opportunities in its core business of container transport and logistics services,' said Ken Cambie, OOIL chief financial officer. 'OOIL will undertake a fuller review of the potential uses of proceeds from the transaction in due course.'
In November 2006, OOIL sold off its terminals division for $2.4 billion to the Ontario Teachers' Pension Plan Board.