UPDATE 1-China COSCO's first-half net loss narrows to 990 mln yuan

Thu Aug 29, 2013 11:22am EDT

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(Adds details on asset sales)

HONG KONG Aug 29 (Reuters) - China's largest bulk shipper, China COSCO Holdings Co Ltd , posted a first-half net loss of 990 million yuan ($162 million) as the global shipping downturn took its toll, though the loss narrowed from a year earlier.

The company, controlled by state-owned China Ocean Shipping (Group) Company, has posted losses for two consecutive years, and a third year - ending December 31 - would trigger delisting from the Shanghai stock exchange.

It will sell majority stakes in its Qingdao Management and Shanghai Tianhongli assets to subsidiaries of its parent company to raise about 3.7 billion yuan, it said on Thursday.

China COSCO's first-half loss narrowed by almost 80 percent from its loss in the same period a year ago, when it stood at 4.87 billion yuan.

The Chinese shipping industry has long suffered from overcapacity and shrinking orders amid the global shipping downturn. China's largest private shipbuilder, China Rongsheng Heavy Industries Group, became a casualty in July when it sought financial help from the Chinese government.

China COSCO had flagged in July that its first-half loss would shrink by 70 to 85 percent from a year earlier, but analysts said that may not be enough to assure a profitable year and the company may sell some of its $1.6 billion in property assets to stay in the black in 2013.

China laid out a detailed three-year plan earlier this month to restructure its massive shipbuilding industry, urging local governments to halt approvals of new projects and companies to move up the value chain by building high-tech vessels.

Shares in China COSCO were down 0.3 percent on Thursday and have fallen by about 10 percent so far this year, compared with a around 4 percent drop in the benchmark Hang Seng Index.

For additional details on the asset sales, please see: here ($1 = 6.1202 Chinese yuan) (Reporting By Yimou Lee, Christina Lo and Clare Baldwin; Editing by Lee Chyen Yee and Pravin Char)

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