Tuesday, June 2, 2009

Neptune Orient Line Announces Rights Issue

SINGAPORE - Singapore shipping giant Neptune Orient Lines is to raise S$1.437 billion in gross proceeds through a rights issue.

NOL, in a filing with the Singapore Exchange on Tuesday, said it will issue about 1.11 billion shares at S$1.30 per share, offering three new shares for every four existing shares.

NOL, around two thirds-owned by Singapore's Temasek Holdings, said Temasek will subscribe to its pro-rata entitlement of 67.4 per cent and could "backstop" the entire rights issue.

The issue price is at about a 15 per cent discount from Friday's close at S$1.53. NOL's shares had been halted from trade on Monday.

NOL said it will use about 50 per cent of the net proceeds for repayment of debt. The rights issue will also be used for possible acquisitions and general corporate and working capital purposes, as well as for further repayment of debt.

"The group's enhanced financial flexibility arising from a stronger balance sheet will provide the group with an important source of differentiation in the credit constrained environment," NOL said.

- CNA/ir

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