Temasek seeking to divest stake in Neptune Orient Lines: WSJ

APL containers. Credit: NOL

Singapore state fund Temasek Holdings is seeking to divest its majority 65 per cent stake in container-shipping company Neptune Orient Lines (NOL), which currently maintains a market capitalisation of S$2.3 billion ($1.692 billion), the Wall Street Journal reported citing peple familiar with the development.

Founded in 1968 as the city-state’s national shipping line, NOL is valued in excess of S$8 billion when debt is included, according to information from S&P Capital IQ.

Singapore corporate regulations require buyers purchasing a stake of 30 per cent or more to make an offer for all shares. Heavily indebted and with a negative income, the distressed Temasek unit is currently in talks with various shipping firms around the world, the report added.

NOL assets include 92 vessels servicing more than 160 ports globally, with a linear business that generated $7 billion in revenue for FY 2014. However, NOL has lost money for three straight years as freight rates have fallen amid an oversupply of shipping capacity.

The year 2014 saw NOL generate $260 million in losses, an increase from $76 million in 2013. Exiting NOL still leaves Temasek with major transportation infrastructure assets in Singapore, with its ownership of PSA International.

NOL has been engaged in merger discussions with various companies, including Germany’s Hapag-Lloyd AG and Hong Kong’s Orient Overseas (International) Ltd. With the shipping industry suffering excess supply of capacity, there is considerable pressure to consolidate.

However, NOL’s potential merger partners may be uninterested in acquiring NOL, given the recent industry developments.

Hapag-Lloyd, a German-Chilean company since merging with Chilean shipping firm Compania Sud Americana de Vapores and the world’s fourth largest container shipper, is planning an initial public offering (IPO) that could result in a valuation of more than $5.5 billion.

The recent trade sale of NOL’s logistics unit, APL Logistics, for $1.2 billion to Japan’s Kintetsu World Express in May 2015, has positioned NOL in a stronger position for divestment. The separation of the logistics and shipping operations allows for better pricing, due to attracting different buyers.

The 35 per cent stake traded on the Singapore Stock Exchange (SGX) as shares have underperformed, with a temporary spike in value when APL Logistics was divested. The price has declined since the divestment, amid continued concerns over global growth.

Also Read:  NOL to sell logistics unit to Japan’s KEW for $1.2b

2Q 2015 sees India account for 4% of Temasek portfolio

Exclusive: Temasek, Cisco invest in Monk’s Hill fund for Southeast Asia

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.