RECENT local mega listing Global Logistic Properties (GLP) has agreed to buy a 19.9 per cent stake in Chinese logistics firm Shenzhen Chiwan Petroleum Supply Base (SCPSB) for HK$539 million (S$91 million).
The acquisition is to be done through GLP's wholly owned subsidiary, China Logistics Holding.
This is GLP's first acquisition since its October listing on the Singapore Exchange, the largest initial public offering since SingTel's IPO in 1993.
GLP is linked to the Government of Singapore Investment Corp.
SCPSB is the parent company of Blogis, the second-largest modern logistics facility provider in China.
According to a GLP statement, Blogis owns 12 properties at eight key logistics hubs in China.
These assets comprise six completed logistics properties, two more properties that are under construction and four parcels of land banks.
GLP chief executive Ming Mei said the location of the Blogis projects will help to strengthen GLP's presence in its existing Chinese markets, and open doors to markets that it has not yet entered, such as Wuhan and Zhengzhou.
'We believe that such a platform will be mutually beneficial to both GLP and Blogis, with GLP being able to leverage Blogis' strong land sourcing abilities and Blogis having the opportunity to capitalise on GLP's strong capital and customer base,' he said in a statement.
Besides real estate property, SCPSB is also involved in offshore petroleum logistics and offshore engineering.
The offshore petroleum logistics services business is essentially a warehousing and logistics services provider in an offshore environment, and it is 'complementary to GLP's core business', GLP said.
SCPSB's offshore engineering services business, meanwhile, owns stakes in two companies, along with strategic partners such as China National Offshore Oil and Sembawang Marine Offshore Engineering, which offer integrated offshore engineering and construction services to the many offshore oil rigs and oil tankers around China.
SCPSB reported a net profit of 112 million yuan (S$22 million) in the last fiscal year, with a net profit margin of 34 per cent, GLP said.
Its announcement comes on the heels of recent reports that the firm did not reveal in its IPO prospectus that it has a non-compete agreement with United States-based rival ProLogis, due to expire in February.
Under the agreement, ProLogis cannot acquire or develop logistic distribution facilities in China until February. In return, GLP undertakes not do the same in the Japanese market.
GLP has since said that the non-compete agreement was 'not material' to its business and thus did not need to be disclosed in its prospectus.