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China National Cereals, Oil & Foodstuffs Import & Export Corp (COFCO), the country's biggest food trader, has not ruled out selling eight beverage plants it jointly owns with Coca-Cola Co to its Hong Kong-listed unit COFCO International.
But it stressed the move would only happen in the long term.
The clarification came after Hong Kong-based Chinese-language newspaper Sing Tao Daily said on Monday that COFCO would sell its 65 per cent stake in the COFCO Coca-Cola Beverages Ltd joint venture to Hong Kong-listed COFCO International Ltd, a deal which would involve total assets of 1 billion yuan (US$125 million).
A spokeswoman with COFCO International, who would only gave her surname, Leung, told China Daily yesterday that the parent firm currently does not have a fixed plan to move the beverage plants to its Hong Kong-listed unit, but would not "rule out the possibility" in the future.
"There will be an official announcement if the group has reached the decision to sell COFCO Coca-Cola Beverages Ltd to COFCO International Ltd. We do not have such a plan for the moment; however, we are not ruling out the possibility that the group would make such a move in the future," Leung said in a phone interview with China Daily.
Leung admitted that the group had been "considering" conducting such a deal but did not reveal any further details.
COFCO International will make an official announcement this week in response to Sing Tao Daily's report.
Investment bank BNP Paribas said in a report yesterday that the deal could be very time-consuming and would not provide short-term gain.
BNP Paribas estimated COFCO International would post a net profit increase of 13 per cent year-on-year to 230 million yuan (US$28.75 million) for the first half of 2006.
Hong Kong-listed COFCO International is due to release its first-half result next Thursday.
Beijing-based COFCO apparently wants to strengthen its listed arm, but the deal would be complicated as it involves a Sino-US joint venture, said South China Research Ltd's associate director Andes Cheng.
COFCO Coca-Cola Beverages owns over 20 production plants in China and sells drinks to 14 provinces in the country.
Based in Hong Kong and co-established in April 2000, COFCO Coca-Cola Beverages Ltd is considered a milestone in the 20-year co-operation between COFCO and the beverage firm.
COFCO Coca-Cola, which is 65 per cent-owned by COFCO with the remainder held by Coca-Cola, is the country's first Chinese majority-owned bottling joint venture.
Formerly known as China Food, COFCO is one of the largest import and export companies in China. |
