Singapore-based Neptune Orient Lines (NOL) has announced an underwritten renounceable Rights Issue which invites existing NOL shareholders to acquire additional new shares in the company, at a discount.
Shareholders will have the opportunity to subscribe for three Rights shares for every four existing shares they hold.
The gross proceeds from the Rights Issue will amount to about S$1.437 billion, or approximately US$1 billion. About half of the proceeds will be used to repay debts. The rest will be available for investments and/or general corporate and working capital purposes, and/or further repayment of debts.
"Through this, NOL aims to further strengthen its balance sheet and to place itself in a better position to capitalise on investment opportunities that may arise in the current economic climate," said a press statement issued by NOL.
The company added that its major shareholder, Temasek, was supportive of the Rights Issue and had, through its wholly-owned subsidiary, Lentor Investment, given an undertaking to subscribe for Temasek's 67.4 percent entitlements and has agreed to sub-underwrite the entire Rights Issue.
