After a mysterious suspension in share trading yesterday, it was revealed by shipping group Neptune Orient Lines (NOL) today that the company plans to raise S$1.4bn (US$972m) by selling rights shares.
The sale of 1.1bn shares at S$1.30 (US$0.90), a 15 per cent discount on their last trading price, will raise enough to bring NOL’s net debt to “close to zero”, the company said.
“The current stock market is conducive for the proposed rights issue as the stock market has improved recently,” NOL said in a press release today.
The container line was hit hard by the economic downturn in its first quarter results.
NOL’s move is backed by Singaporean state investor Temasek, which already owns 67.4 per cent of the shipping company and could purchase the entire share offering if no other buyers come forward.
Half the money raised will be used to pay off debt, and half will go to investments and working capital, reported Reuters.
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