A Chinese national flag flies in front of COSCO's headquarters in Beijing August 26, 2010. REUTERS/Barry Huang

China Cosco Holdings Company Ltd. (HKG:1919; SHA:601919), China’s largest and the world’s second-largest company, announced it will sell all of its shares in the subsidiary company Cosco Container Industries Ltd. for 7.54 billion yuan ($1.23 billion) -- a move to save itself from the fate of delisting after two consecutive years in the red, according to 21CBH.

Cosco itself is a listed flagship subsidiary of the Cosco Group, which is a state-owned corporation. In 2011, Cosco reported a loss of 10.45 billion yuan ($1.70 billion) and a loss of 9.56 billion yuan ($1.56 billion) in 2012. By Chinese trading regulations, after two consecutive years of losses, the company has been warned of possible delisting, according to 21CBH, a Chinese financial news website.

China Cosco
After two years in the red, China Cosco is selling off subsidiaries in the hopes of covering its losses this year and avoiding delisting. Reuters/Barry Huang

In its Q1 report, Cosco once again reported heavy loss of 1.99 billion yuan ($324 million), and, if the company cannot reverse its loss by the end of 2013, it will be delisted. In a bid to avoid delisting, Cosco will sell its shares in Cosco Container Industries and will make a tidy profit of 2.91 billion yuan ($474 million) before taxes.

This is not the first move on Cosco’s part to avoid delisting. On March 27, Cosco sold another subsidiary, Cosco Logistics Ltd., for 6.74 billion yuan ($1.10 billion). Cosco made a profit of 2.38 billion yuan ($388 million) from that sale, 21CBH reports.