SMRT – BT
SMRT buys stake in China transport firm
It will pay $89.7m for a 49% stake via its subsidiary SMRT Hong Kong
SMRT Corp has agreed to pay $89.7 million for a 49 per cent stake in a leading road transport company in Shenzhen.
Via subsidiary SMRT Hong Kong, SMRT has entered into a deal to buy investment company Shenzhen Zoto Investment’s equity interest in Shenzhen Zona Transportation Group (Zona).
KhattarWong provided legal services for the transaction.
Zona has a fleet of 803 buses, 142 charter and tourist buses, 78 long-haul coaches, 830 taxis and 260 leased cars in the Shenzhen region.
The Zona group comprises 10 subsidiaries and three associated companies.
Zona itself will become an associate company of SMRT following the acquisition.
SMRT said Zona has grown its bus fleet from just 300 in six years. It is the bus operator in Shenzhen’s Bao An district, so growth is expected to be robust.
The other 51 per cent of Zona’s equity will continue to be held by National Express Transportation Group (NE), a company that provides inter-city bus services in China.
SMRT president and CEO Saw Phaik Hwa said the acquisition is a ‘milestone in the expansion of SMRT’s business overseas’.
Zona is SMRT’s first equity investment. Its other overseas venture was in August last year when its subsidiary SMRT Engineering partnered Dubai real estate developer Nakheel to operate The Palm Monorail there.
The investment in Zona will be accretive to SMRT’s earnings but is not expected to have a material impact on the group’s financial results for full-year 2009.
SMRT posted a 6.2 per cent rise in net profit to $40.3 million for its first quarter ended June 30. Revenue rose 11.2 per cent from the previous year to $215.9 million.