CKSD Introduces CMHI as a Strategic Investor of CKRTT

HONG KONG, Dec. 15, 2010 /PRNewswire-Asia/ -- Chu Kong Shipping Development Co., Ltd ("CKSD" or the "Company")(Stock code: 560), a leading comprehensive transportation services supplier in the Guangdong-Hong Kong- Macau Region today announced that the Company and Parkland Enterprises Limited (the "Purchaser") entered into an Equity Transfer Agreement. CKSD has agreed to sell 20% of the equity interest of Chu Kong River Trade Terminal Company Limited ("CKRTT") to the Purchaser which is wholly owned by China Merchants Holdings (International) Company Limited ("CMHI"). Through the disposal of the sale shares by the Company, CMHI will become a strategic investor of CKRTT.

The consideration of HKD131 million is to be paid in cash by the Purchaser in two installments. The Consideration has been determined after arm's length negotiations between the Company and CMHI with reference to the price-to- earnings ratio of companies listed in Hong Kong whose principal activities are similar to the Group and the financial information and performance of CKRTT Group. The Company intends to use the investment as general working capital. According to the difference between the consideration of HKD131 million and 20% of the unaudited consolidated net asset value of the CKRTT Group of approximately HKD58.31 million as at 30 June 2010, it is estimated that the gain arising from the disposal will be approximately HKD72.69 million.

Through the transaction, the shareholding structure of CKRTT would be optimised, as CKSD and CMHI will enjoy very strong complementary advantages in business segments, strategic development and resources control. The synergies created should enhance the integrated competitiveness of both companies. Under the collaboration, CKSD would provide comprehensive consolidation and distribution support services for the Shenzhen Western Port Area ("SWPA") controlled by CMHI, leveraging its widespread marketing, terminal and feeder transportation networks, promoting SWPA as a new seaport. For its part, CMHI is to use CKSD terminals as their primary port and container return point, utilising its well-developed terminal management and supply chain management experience to enhance the operating efficiency of CKSD, enhancing the competitiveness of both companies. The transportation volume of CKSD is expected to increase significantly under this collaboration.

CMHI is the flagship company under China Merchants Group for port and logistics segments, and a constituent stock of the Hang Seng Index. As the industry leader in China, CMHI's port business covers the Bohai Rim, the Yangtze River Delta and the Pearl River Delta, and it has been actively expanding its port business into the Southeast Asia region as the largest public terminal operator in China.

Dr Hua Honglin, Chairman of CKSD, said, "We are pleased that CMHI has become a strategic shareholder of CKRTT, following the strategic framework cooperation agreement we signed earlier. Both sides should enjoy strong complementary advantages and business synergies through this strategic alliance. The alliance reflects CMHI's confidence on CKSD, as a leading comprehensive transportation services supplier in the Guangdong-Hong Kong- Macau Region. We aim to jointly establish a premiere integrated logistics services system and a feeder-carrier-linked port transportation system hub supported by the second category port in the Pearl River Delta region. In this way we can both mutually benefit, as well as maximize our shareholders' value."

About Chu Kong Shipping Development Co., Ltd.

Chu Kong Shipping Development Co., Ltd., listed on The Stock Exchange of Hong Kong Limited in 1997, is the only Hong Kong-listed company under the umbrella of Guangdong Province Navigation Holdings Company Limited. It provides comprehensive logistics services and operates high-speed ferry business within Guangdong-Hong Kong-Macau Region, as well as invests and manages river cargo terminals in Mainland China. With well-established marketing, terminal, transportation and information networks in the Pearl River Delta and profound industry experience, the Company is committed to providing comprehensive services in river transportation, stepping toward its goal to become a leading comprehensive transportation services provider.

    For Enquiries:

    Strategic Financial Relations (China) Limited

     Marcus Keung
     Tel: +852-2114-4967
     Email: [email protected]

     Winnie Kwong
     Tel: +852-2864-4839
     Email: [email protected]

     Krista Chen
     Tel: +852-2864-4837
     Email: [email protected]

     Vivienne Leung
     Tel: +852-2864-4846
     Email: [email protected]

SOURCE Chu Kong Shipping Development Co., Ltd.