INTERESTED PERSON TRANSACTIONS - CANCELLATIONS OF SHIP BUILDING CONTRACTS

29 September, 2009

The Board of Directors of COSCO Corporation (Singapore) Limited (the “Company”) wishes to announce that its subsidiary, COSCO (Zhoushan) Shipyard Co., Ltd. (“COSCO Zhoushan”) (being a subsidiary of the Company’s 51% owned subsidiary, COSCO Shipyard Group Co., Ltd) had entered into cancellation agreements with the nominees of COSCO International Ship Trading Co., Ltd (the “Buyer”) (the “Cancellation Agreements”) in relation to the cancellation of ship building contracts for 2 units of pure car and truck carriers (“PCTC”) of 5,000 units each entered into by COSCO Zhoushan (the “Ship Building Contracts”). The contract price of each of the PCTC carrier is at US$52,500,000 each. Construction of the 2 vessels has not commenced. The Ship Building Contracts, entered into on 6 June 2007, were interested person transactions for the purposes of Chapter 9 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited (the “Listing Manual”) and for which the Company obtained shareholders’ approval on 25 September 2007.

Subsequent to the entry into of the Ship Building Contracts, the Buyer and COSCO Zhoushan have had to enter into numerous further discussions and negotiations over the implementation of the Ship Building Contracts. In the circumstances, they have decided that the most viable solution for them mutually would be to cancel the Ship Building Contracts by mutual agreements. The terms of the cancellations have been arrived at after more than nine months of negotiations with the Buyer taking into account, amongst others, pre-construction expenses incurred by COSCO Zhoushan and expenses incurred by the Buyer.

Under the Cancellation Agreements, the nominees of the Buyer have agreed to pay compensation to COSCO Zhoushan amounting to US$10,300,000 in aggregate and COSCO Zhoushan has agreed to return the instalments paid by the Buyer under the Ship Building Contracts.

The Audit Committee of the Company is of the view that the terms of the above cancellations are on normal commercial terms and that such terms are not prejudicial to the interests of the Company and its minority shareholders.

The total value of all the Company’s interested person transactions (as defined in the Listing Manual) with China Ocean Shipping (Group) Company and its associates (as defined in the Listing Manual), which includes the Buyer, for the current financial period to 30 June 2009 is approximately S$579,846,000. The total value of all the Company’s interested person transactions for the current financial period to 30 June 2009 is approximately S$580,335,000. The above cancellations are not expected to have a significant impact on the net tangible assets (NTA) and earnings per share (EPS) of the Company and the Group for the year ending 31 December 2009.

For and on behalf of the Board
Jiang Li Jun
Vice Chairman / President

Cosco Corporation (Singapore) Limited