Cosco Pacific, the terminal-operating arm of China Cosco Holdings, said it may put some operations in a business trust following Hutchison Port Holdings Trust's trading debut on the Singapore Stock Exchange earlier this month.
"We are looking at it comprehensively," Deputy Managing Director Kelvin Wong told reporters Wednesday in Hong Kong. "The steady cash flow from our port business has attracted many investment bankers to come and tell us the benefits of port trusts."
Forming a trust may help boost returns for investors as Cosco Pacific's dividend yield trails trusts' payouts, Wong said. HPH Trust, which raised $5.5 billion in its Singapore IPO, offered a projected yield of 5.89 percent, according to Bloomberg News.
Cosco Pacific has no definite plans for a trust, Wong said. He didn't comment on which assets could be put into one.
The company, which also runs the world's third-largest container-lessor and holds a stake in a container manufacturer, plans capital expenditure of about $1 billion this year, about the same as 2010, said Financial Controller Eddie Lui. The plan includes spending $620 million on port facilities and $380 million on buying new containers, he said.
Cosco Pacific more than doubled 2010 net income to $361.3 million, it said in a statement to the city's stock exchange Wednesday.
Container volumes across Cosco Pacific's terminal operations rose 19 percent to 48.5 million 20-foot boxes last year, as world trade rebounded from the global recession. The company has stakes in about 20 cargo-handlers, predominately in China and Hong Kong.
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