(Yicai) July 30 -- COSCO Shipping Development, a unit of shipping giant China COSCO Shipping, said it has ordered 15 Newcastlemax bulk carriers of 210,000 tons deadweight each with reserved installation space for green fuel power facilities worth around CNY7.9 billion (USD1.2 billion) to improve its relevant assets and ship leasing business.

Shanghai Waigaoqiao Shipbuilding will build 10 of the ships, with Nantong Xiangyu Shipbuilding & Offshore Engineering to handle the rest, COSCO Shipping Development announced late yesterday. The building price for each, excluding tax, is CNY528 million (USD78.1 million), which may be adjusted based on the vessels' actual performance data, the delivery dates, and other factors, it noted.

The 15 Newcastlemax bulk carriers are expected to be delivered between May and December 2030, Shanghai-based COSCO Shipping Development added.

The vessels will be leased for long-term operational periods to the asset platform subsidiary of COSCO Shipping Bulk in Hong Kong, COSCO Shipping Development said, adding that after completing a future dual-fuel power upgrade, the annual rent for each vessel will likely reach up to CNY59.4 million (USD8.8 million), excluding tax.

COSCO Shipping Development aims to grasp opportunities created by the green and low-carbon trend in the shipping industry, with the new ships expected to contribute long-term stable income and cash flow, it pointed out. The move will also help the company ally with upstream and downstream firms to jointly promote the use of Chinese yuan in the building, leasing, and operation of ocean-going carriers, it stressed.

In a separate announcement on the same day, COSCO Shipping Development unveiled plans to issue no more than CNY6 billion corporate bonds on the Shanghai Stock Exchange, with a maturity of up to 10 years. The bonds' interest rate, as well as calculation and payment method, will be decided through negotiation between the company and the underwriter(s) at the time of issuance, it noted.

The proceeds, after deducting the issuance expenses, will be used to repay COSCO Shipping Development's interest-bearing debts, supplement its working capital, and fund project construction and operation, the firm noted, without disclosing if they will also be used for the 15 Newcastlemax bulk carriers.

Shares of COSCO Shipping Development [SHA: 601866] ended 1.2 percent higher at CNY2.47 (37 US cents) each today. The stock of China CSSC Holdings [SHA: 600150] and Xiamen Xiangyu [SHA: 600057], the parent companies of the two ship builders, dropped 0.3 percent to CNY34.63 (USD5.12) and rose 2.1 percent to CNY6.71, respectively. The broader Shanghai stock market fell 0.6 percent.

Editor: Martin Kadiev