NEPTUNE Orient Lines, the world's seventh largest container shipping company, plans to raise $1.437 billion from issuing 3 rights shares for every 4 existing shares to seize investment opportunities amid the economic crisis.

The company becomes the sixth Temasek-linked company to make a cash call since December last year.

Chairman Cheng Wai Keung said: "We are undertaking this rights issue, not because our balance sheet is understrength, but in this uncertain economic condition, it is prudent to strengthen our capital position to enable us to seize invesment opportunities as they arise."

NOL will sell 1.1 billion shares at a price of $1.30 a share, which is roughly 15 per cent below the closing price of $1.53 on 29 May. It suspended its shares on Monday prior to making this announcement. Temasek Holdings, which owns about two-thirds of the company, is prepared to underwrite the entire rights issue, Mr Cheng said.

Approximately half of the $1.4 billion in net proceeds, after subtracting $36 million in costs, will be used to repay debt. NOL chief financial officer Cedric Foo said that the company currently had US$1.4 billion in debt and about US$400 million in cash.

"If all the proceeds go to repaying debt, the company will be more or less debt-free," he said.

Mr Cheng said the current stock market was conducive for the rights issue. NOL's share price fell to as low as 86.5 cents in March as it was slow in quelling speculation that it was preparing for a rights issue, for which it was rapped by the Singapore Exchange. It share price has since surged some 77 per cent as equity markets have rallied amid hopes that the global economy has bottomed out.

The shipping line posted a worse than expected US$244.6 million net loss for the first quarter, hit by the drastic collapse in trade since the onset of the financial crisis last September. Container flow continues to falter, as it moved 22 per cent fewer cargo boxes in the four weeks to May 1 compared to a year ago.

Chief executive Ron Widdows, who expects the company to be in the red for the full year, said the market was still volatile, although "volumes have stabilised and have improved a bit".

Its container arm APL said last week that it is planning to raise freight rates by between US$100 and US$300 per container on its Asia-Europe trade routes, which have plunged with the slowdown in trade activity.