Temasek Holdings selling NOL: Report

The headquarters of Neptune Orient Lines in Singapore.
The headquarters of Neptune Orient Lines in Singapore. PHOTO: BLOOMBERG

Singapore investment firm Temasek Holdings has put Neptune Orient Lines (NOL) up for sale, according to a Wall Street Journal (WSJ) report yesterday.

The report, citing unnamed sources, said the liner company has been "shopped to prospective buyers" in recent months. NOL is about 67 per cent owned by Temasek, going by Bloomberg data.

The company had been in talks with a prospective buyer, but "the two sides couldn't agree on price", added the report.

WSJ said such a deal would allow Temasek to exit from the container-shipping business, which has been suffering from overcapacity in recent years.

Both Temasek and NOL declined comment when contacted by The Straits Times yesterday.

In February, NOL announced the sale of its profit-making logistics business, APL Logistics, to Japanese freight carrier Kintetsu World Express for US$1.2 billion (S$1.6 billion). This sparked market speculation that the entire company would be sold off as well.

An earlier Bloomberg report, citing Credit Suisse, said a natural partner for the container line would be Orient Overseas International, which is controlled by the family of Hong Kong's first post-colonial leader.

NOL was founded in 1968 as Singapore's national shipping line. It has been struggling in recent years, amid the global overcapacity in the liner industry.

The company has pared its losses, reporting a net loss of US$11 million in the first quarter ending in April, compared with US$98 million in the same period the year before. Revenue was down 13 per cent at US$2 billion. But the liner industry "continues to face persistent overcapacity and uncertain global economic prospects", said NOL group president and chief executive Ng Yat Chung then.

NOL shares closed 0.5 cent higher at 87.5 cents yesterday. It has fared poorly since the start of the year, despite surging to $1.185 in April. For the year to date, the stock is up 4 per cent.

NOL, which has a market capitalisation of about $2.3 billion, remains among the world's largest container transportation companies. It operates 92 vessels that service more than 160 ports globally.

A version of this article appeared in the print edition of The Straits Times on July 17, 2015, with the headline 'Temasek Holdings selling NOL: Report'. Print Edition | Subscribe