Yang Ming’s shares have been suspended on the Taiwan Stock Exchange from last Thursday until May 3 as part of its financial restructuring and reverse stock split.
Yang Ming Marine Transportation’s shares have been suspended on the Taiwan Stock Exchange from last Thursday until May 3 as part of an earlier announced financial restructuring and reverse stock split.
“Our recapitalization plan will initially allow Yang Ming to reduce its equity capital, after which infusion of new capital is then obtained from various private and public investors,” the liner carrier said in a customer advisory published today. “At the appropriate time, we will also announce the identities of those new investors.”
The suspension of shares last week was “a standard procedure that is routinely carried out in the Taiwan Stock Exchange when a company implements a recapitalization as in the case of Yang Ming,” the company explained.
Wen-Jin Lee, the chief executive officer and president, and Henry Ho, treasurer and senior vice president at Yang Ming’s North America head office in Newark, N.J., emphasized the stock suspension had been long planned and there was no reason for any concern by the carrier’s customers. The plan was approved by shareholders on Dec. 22 and Korea’s Financial Supervisory Commission on Jan. 18.
Drewry Financial Research Services noted, “As it stands, the capital reduction will have no bearing on the market cap since its existing market cap using, 3,004,440,135 shares x NTD (New Taiwan Dollars) 6.15, will be equal to its new market cap of NTD 18.5 billion (1,403,941,349 shares x NTD 13.15).”
With fewer shares, the value per share will increase to NTD 13.15 from NTD 6.15, almost twice its existing share price, Drewry said.
Earlier this month, Yang Ming said it had raised $54.4 million in an offer of 161.33 million new shares to six investors, both government institutions and private companies. They include the National Development Fund of the Taiwan Government, Taiwan Navigation Co., Taiwan Chinachem, T3ex Global Holdings, Mercuries Life Insurance, and Superstar Investment.
The National Development Fund will hold a 6.39 percent stake in Yang Ming, and the company said it anticipates it “will continue to invest in Yang Ming in subsequent rounds.”
Yang Ming said Taiwan’s government, including the Ministry of Transport and Communications, now owns 36.62 percent of the company.
Yang Ming is a member of “THE” Alliance, a containership space sharing agreement on major east-west trades that began this month and also includes Hapag-Lloyd of Germany; and Japan’s “Big Three” carriers, NYK, MOL and “K” Line.
SeaIntel CEO Lars Jensen said there were “strong indications in the past six months from the Taiwanese government that they will not let their shipping lines falter, to the point where they were public about putting a $1.9 billion credit facility up for availability for the shipping lines.”
Jensen said it was important for both Yang Ming and its alliance partners to reassure shippers that there will be no service disruption.
THE Alliance took steps in that direction back in December when, in the wake of the bankruptcy of South Korean liner carrier Hanjin, it inserted language in its vessel-sharing agreement filed with the U.S. Federal Maritime Commission to create safeguards in case any of the five members have financial difficulties in the future.
Wen-Jin Lee said the rollout of THE Alliance in the U.S. has gone smoothly and expanded Yang Ming’s portfolio of services. The company now has seven transatlantic services, including a service to the Gulf of Mexico and U.S. West Coast via the Panama Canal. In the transpacific, he said the number of strings has remained about the same, “but the port calls are quite different now. Now we have more coverage from South Asia, direct calls to the USA.”
YM confirms shares suspended on Taiwan Stock Exchange
