Hong Kong’s New World First Ferry Services to be acquired by Chu Kong Shipping Enterprises
- Cargo transport firm Chu Kong Shipping Enterprises pays HK$232.8 million (US$30 million) for a 60 per cent stake in New World First Ferry Services
- Existing owner NWS Holdings will control the remaining 40 per cent stake
Cargo transport firm Chu Kong Shipping Enterprises (Group) said on Monday that it plans to acquire 60 per cent of New World First Ferry Services from NWS Holdings for HK$232.8 million (US$30 million).
Set up in 1999, NWFF runs five inner harbour and outlying island ferry routes in Hong Kong. Following the purchase, due to be completed on May 31, NWFF will become a non-wholly owned subsidiary of Hong Kong-listed CKSG.
The remaining 40 per cent will be continue to be owned by conglomerate NWS Holdings, flagship of Hong Kong-listed New World Development.
In an exchange filing after market close, CKSG – which operates cargo transport, storage as well as ferry services between Hong Kong and mainland China – said NWFF will “further complement” its existing business and “enhance the group’s competitiveness in passenger transportation business”. The company said it has used “internal resources” to fund the acquisition.
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NWFF’s passenger fares will remain the same until the end of its existing licences at the end of March 2021. Following that, it would “continue to provide reliable and comfortable ferry services at a stable fare in adherence to the terms and conditions of the licence set out by the government,” according to a statement by the three companies.
“The goal of this partnership with NWS is to further enhance the service quality of the ferry industry,” CKSG said in the statement.
NWFF said it “welcomes the addition” of CKSG as its new shareholder.
Both CKSG and NWS have agreed there will be no lay-offs at NWFF. Existing management and staff structures will stay in place with unchanged compensations and transport benefits. Meanwhile, CKSG said it plans to “invest in talent development to ensure workforce stability and continuous growth”. But it did not elaborate.
For the year ended June 30, 2019, NWFF recorded a net profit after tax of HK$30.3 million, a 27 per cent decrease from a year earlier. As of June 2019, its net asset value was about HK$101.5 million.
The buying price was agreed after taking into account business development and future prospects of NWFF, historical financial performance and existing brand reputation, as well as its fair market value as at the valuation date, according to the filing.
“Since early 2019, NWS Holdings has been refining its development strategy to optimise the company’s businesses,” it said in the joint statement. “We believe the new partnership will take the service standards of NWFF to the next level”.
