Singapore’s Temasek Holdings' sale of Neptune Orient Lines offers potential buyers a modern fleet at a bargain — around $2 billion, according to industry and banking sources.
However, NOL has lost more than $1 billion in four years and may be up for sale at a time when the container shipping industry is in the grip of a severe prolonged downturn. The global sector's debt has nearly doubled to $86 billion over the past decade, said Rahul Kapoor, Singapore director of Drewry Equity Research, with spot Asia-to-Europe and trans-Pacific container freight rates near six-year lows.
Still, industry sources say NOL's new ships and 2.8 percent share of the global container shipping business will appeal to players seeking an edge over rivals. United Arab Shipping Company is expected to join Hapag-Lloyd and Hamburg Süd in running the rule over NOL, sources said.
Temasek, with nearly $200 billion in assets, reportedly hired Citigroup to seek buyers for the majority stake in NOL, bought in 2004 for $2
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billion, triggering the sale of the whole firm under Singapore rules.
Buyers would need to offer at least 30 percent more than NOL's current market value of about $1.8 billion - the usual premium paid to acquire a publicly traded company, bankers said. Both Citi and Temasek declined comment.
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