Tuesday June 2, 05:09 AM
Singapore's NOL in 993 mln dlr rights issue plan
SINGAPORE (AFP) - Singapore container shipping firm Neptune Orient Lines (NOL) announced plans to raise almost a billion US dollars through a rights issue.
NOL said the issue, amounting to 1.43 billion Singapore dollars (993 million US), would boost the company's balance sheet, help repay debt and tap any business opportunities that might arise.
About 1.1 billion new shares will be issued at 1.30 Singapore dollars each, which is about a 15 percent discount from NOL's stock close of 1.53 dollars on the local stock exchange Friday.
Shareholders eligible to subscribe will get three new shares for every four existing ones, NOL said in a statement.
"The current stock market is conducive for the rights issue," NOL's chairman Cheng Wai Keung said at a press conference.
NOL expects net proceeds of 1.40 billion dollars from the issue after deducting related expenses and will use half to pay off part of the company's debts, the statement said.
The remaining amount will be used for investment opportunities, working capital purposes or further debt repayment, NOL said.
NOL has gross debts of 1.4 billion US dollars, chief financial officer Cedric Foo said.
State-linked investment firm Temasek Holdings, which owns 67.43 percent of NOL, will subscribe fully to the rights issue that is within its shareholding entitlement, the container shipping firm said.
NOL has been hit by the global economic slump, reporting a first quarter loss of 245 million US dollars and expecting a full-year loss in 2009.
It said business was hit by a significant decline in global trade flows and falling cargo rates as economies worldwide reeled from the crisis.
- Dow Jones Newswires contributed to this story -
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