'K' Line to raise fresh capital through share sale

JAPANESE shipping company "K" Line has announced plans to sell 126.5 million shares of common stock - 17 per cent of the company - to raise JPY34.6 billion (US$384.5 million) as it expects poor financial results.

The carrier said it would set a price for the new shares between February 23 and 26, reports the American Shipper. The company said the capital was required "for expansion of stable earnings base and sustainable growth through restructuring business portfolio."

"While new investment in containerships is frozen until there is actual supply and demand balance, dry bulk business will be expanded to increase stable earnings sources and further growth of the car carrier fleet," said the company statement.

"Moreover strategic investment in growth areas for energy resources development-related business, heavy cargo ships and logistics is being carried out for expansion of stable earnings base. In addition, execution of this stock offering and building up stable earnings will be able to strengthen its financial base against the present business environment. "K" Line will strive for stable earnings base and sustainable growth in both the medium and long-term through business restructuring and strengthening of its financial base," the statement said.

According to Paris-based consultants AXS-Alphaliner: "K" Line currently has 18 containerships on order that are slated for delivery between 2010 and 2012, ranging in size from 4,300-9,040 TEU.

The carrier has nine ships fixed on long-term charter. Its new box ship commitments total 145,000 TEU, representing 45 per cent of its current operated fleet.

(Source: www.schednet.com)