NYK plans to sell US$1.6 billion in shares to counter slump

JAPAN's NYK Line, the country's biggest shipping company, has announced it plans to raise US$1.6 billion through a public share sale to finance restructuring to counter the global downturn.

NYK said it would issue 427 million new shares at home and abroad, and an additional 33 million in third-party allotments to Nomura Securities, increasing outstanding shares by 37 per cent, Reuters reports.

The company has been devastated by plunge in container shipping demand and its loss-making air cargo business, causing net losses of JPY29.3 billion (US$326 million) in its April-September first half.

NYK recently said it would halve its container fleet to 60 ships by April 2016 and is in negotiation with Japan Airlines to merge air cargo operations.

"It's time Nippon Yusen scrapped its strategy of becoming a comprehensive service provider," Mitsuru Miyazaki, an analyst at SMBC Friend Research Centre, told Reuters. "The company should focus its investment on sea transport as businesses like bulk carriers still have a lot of growth potential."

Source: www.schednet.com