Tuesday, June 02, 2009
Singapore: Neptune Orient Lines, Southeast Asia’s largest container carrier, plans to raise S$1.44 billion ($1 billion) selling new shares to repay debt, writes Bloomberg. Investors will be able to buy three new shares for every four held at S$1.30 apiece, a 15% discount from the May 29 closing price, the company said in a statement to the Singapore stock exchange. Temasek Holdings Pte, the company’s largest shareholder, will sub-underwrite the entire issue.
“The rights issue will strengthen the group’s balance sheet, provide additional general working capital and enhance its financial flexibility,” the company said in the statement.
Half of the proceeds from the rights issue will be used for repayment of debts and the balance will be used for investments, general corporate and working capital purposes or for further repayment of debts, the statement said.
Neptune Orient’s shares have gained 50% this year, providing ceo Ron Widdows with the ability to raise funds in the company’s biggest share sale since its initial public offering in 1981. “Asset prices are depressed today and will probably remain so for some time,” he told reporters today. “It’s certainly an area that we would look at as opportunities develop.”
NOL posted a loss of $244.6m in the first quarter after revenue slid 36% to $1.5bn. The company last month predicted it may post a “significant” full- year loss due to “adverse business operating conditions.”
Widdows, who took the helm last July, voluntarily agreed to take a 20% cut in basic pay from March, while non- executive directors have accepted a 20% reduction in fees. The company in April said it’s more than doubling its cost-savings target for the year to as much as $550m. [02/06/09]