NOL to sell its logistics business to Japanese freight carrier for $1.5 billion

Neptune Orient Lines (NOL) has sold its logistics business, APL Logistics, to Japanese freight carrier Kintetsu World Express for US$1.2 billion (S$1.5 billion). -- PHOTO: BLOOMBERG 
Neptune Orient Lines (NOL) has sold its logistics business, APL Logistics, to Japanese freight carrier Kintetsu World Express for US$1.2 billion (S$1.5 billion). -- PHOTO: BLOOMBERG 

Neptune Orient Lines (NOL) has sold its logistics business, APL Logistics, to Japanese freight carrier Kintetsu World Express for US$1.2 billion (S$1.5 billion).

NOL, which advised investors that it had suffered three straight years of pre-tax full-year losses after posting fourth quarter net losses of US$85.1 million from losses of US$137 million a year earlier, said the net proceeds of the sale will be applied to strengthen its financial position, including to repay its borrowings.

"This is a strategic move that will allow us to focus on improving our liner shipping business, while at the same time enabling APL Logistics to grow.

The transaction will also strengthen our balance sheet and unlock value for our shareholders," said Mr Ng Yat Chung, NOL's group president and chief executive.

NOL said that the divestment of APL Logistics follows a robust and highly competitive process ,and further said that the divestment will allow APL Logistics to realise its full potential.

"The proposed transaction with KWE is expected to provide APL Logistics with the opportunity to expand its business with the backing of a company with strong fundamentals and a commitment to grow in the logistics space. We believe that KWE has the ability and the ambition to continue APL Logistics' growth strategy," Mr Ng added.

"We intend to retain the headquarters of APL Logistics in Singapore and to run it as a separate unit," Mr Satoshi Ishizaki, group president and chief executive of KWE, said.

The transaction is subject to NOL shareholder and regulatory approvals.

Citi and HSBC acted as financial advisors to NOL during the transaction. KWE's financial advisor is Nomura Securities.