Temasek Holdings’, Singaporean state’s investor, has planned the sale of Neptune Orient Lines offering potential buyers a modern fleet at a competitive price which is expected to be around us dollar 2 billion.
The NOL assets have lost more than us dollar 1 billion over the last four years. The worldwide sector’s debt has nearly doubled to us dollar 86 billion over the past 10 years, said Rahul Kapoor, from Drewry Equity Research, caused by spot rates in the trade between Asia to Europe and transpacific container near to six-year lows.
Nevertheless maritime sources claim NOL’s new ships and 2.8% slice of the global container shipping business can be expected to appeal to players seeking an edge over rivals. United Arab Shipping Company (UASC) can be expected to join the likes of Germany’s Hapag-Lloyd AG and Hamburg Sud in running the rule over NO.
Temasek, having nearly us dollar 200 billion in assets, recently hired Citigroup to search buyers for the majority stake in NOL it bought in 2004 for us dollar 2 billion. NOL has made losses in five of the past six years, but the bank’s task may have become a tad easier after after NOL recentely reported a tiny net profit in April-June after six straight quarters of losses.
Buyers would need to offer at least 30 percent more than NOL’s current market value of about us dollar 1.8 billion. A Hong Kong-based structured asset banker stated that “UASC now has much wider options since the Qataris took control, and the Qataris want to be world-class in everything they touch,” UASC, Hapag-Lloyd and Hamburg Sud all declined to comment.
“The company has a duty to consider all options to maximize shareholder value. Hypothetically if I receive a good price for the business, we will always consider selling,” said NOL CEO Ng Yat Chung. “What I can say now is that the company is totally focused on returning the liner business into profitability,” he said. In line with that commitment, it sold its only profitable logistics division for us dollar 1.2 billion this year.
