Chu Kong Shipping Development enters management agreement with parent company

Leverages experience and expertise in management and operation of its parent company’s assets while it appoints Liu Weiqing as chairman.

Chu Kong Shipping Development Co., Ltd (“CKSD”), a leading comprehensive transportation services supplier in the Guangdong-Hong Kong-Macau Region, announced it would enter into a management agreement with its parent company Chu Kong Shipping Enterprises (Holdings) Company Limited (“CKSE”). Pursuant to the agreement, the Company agreed to provide management services to selected assets of its parent, CKSE. CKSD also announced that one executive director and three non-executive directors have been added to its board and changes in the position of general manager and financial controller, accordng to a Chu Kong Development report.

Assets under the management agreement
The assets for which CKSD will provide services include: ship repairing, duty free goods supply, diesel and oil supplies for ships, legal advisory services to vessel owners, agency services of water transportation, port warehouse services, cargo handling, and management of Logistics Park. The period during which management services would be performed is from 1 July 2011 to 30 June 2014. The entering of the Management Agreement will enable CKSE to leverage on the Group’s experience and expertise in operating and management of the businesses of the Parent Assets such as water transportation、cargo handling and integrated logistic services and, etc. By reducing the management chain and promoting professional operations, the Company can deploy its own resources more effectively and improve operational efficiency.

Changes of management
The Board of CKSD has announced that Mr Liu Weiqing, Chairman of Guangdong Province Navigation Holdings Co., Ltd. (“GPNHCL”) and CKSE had been appointed as Non-Executive Director of the Company and Chairman of the Board and that Mr Huang Liezhang as Executive Director and General Manager, Mr Yu Qihuo and Mr Zhang Lei have been appointed as Non-Executive Directors for an initial term commencing from 20 June 2011 until the next Annual General Meeting of the Company. After these appointments, the Board would consist of three Non-Executive Directors, three Independent Non-Executive Directors and five Executive Directors. A Board committee, the Nomination Committee, has been established which consists of two Non-Executive Directors and one Executive Director. Mr Hua Honglin remains as an Executive Director of the Company and a member of the Executive Committee and Mr. Yang Bangming remains as an Executive Director of the Company. Mr Ke Guigen has been appointed as the new Financial Controller of the Company.

Mr Liu Weiqing, Chairman of CKSD said: “It is my honor and great pleasure to become a member of the board and serve as the new Chairman of CKSD. I am also pleased to welcome Mr Huang, Mr Yu and Mr Zhang to join the Company, and to express my sincere thanks for Mr. Hua and other colleagues’ hard work. Changes of management demonstrated close interactions between CKSD and CKSE and also reflected GPNHCL and CKSE’s great support and concern on CKSD. The changes of management optimise communication between CKSE and CKSD, expedite the beneficial transfer of quality parent assets to CKSD, and also accelerate the pace of listing of the parent company as a whole.”

“As stated in the annual report of the Company for the year ended 31 December 2010, in 2011, the Company is to focus on implementation of five key tasks. One of these is to continue acquisition of quality assets of the parent company and step up the pace in the overall listing of the parent company. Under the management agreement with the parent company, the Company can leverage its experience and expertise to efficiently operate and manage the businesses of the parent assets such as water transportation, logistics services and cargo handling. Moreover, the management agreement further accelerates the injection of the parent’s assets. We are confident that the management agreement will promote the Company's business development, and thus further expand the business for both sides”.