Thursday, July 16, 2015


In an industry with excess capacity, what is the value of a container line with no mega ships, aka, desirable assets?

Temasek Puts Neptune Orient Lines Up for Sale

Deal would allow state-investment company to exit the container shipping business

A Neptune Orient Lines container in Singapore. ENLARGE
A Neptune Orient Lines container in Singapore. Photo: Bloomberg News
Singapore state-investment company Temasek Holdings Pte. Ltd. has put its $1.7 billion container-shipping company up for sale, according to people familiar with the situation.
Heavily indebted, money-losing Neptune Orient Lines Ltd. NPTOY 0.39 % , 65% owned by Temasek and listed in Singapore, has been shopped to prospective buyers in recent months, these people said. It has been in talks with one, but the two sides couldn’t agree on a price, according to one of the people. The discussions could include other potential buyers.
Neptune Orient Lines, known as NOL, earlier was active in merger discussions with shippers including Germany’s Hapag-Lloyd AG and Hong Kong’s Orient Overseas (International) Ltd. 0316 -1.01 % There’s pressure to consolidate in the industry, which has suffered from overcapacity in recent years. The big three by capacity, Denmark’s A.P. Møller-Maersk AMKBY 0.91 % A/S, Switzerland’s Mediterranean Shipping Co. and France’s CMA CGM SA, planned an alliance, only to have it scuttled last year by China’s Ministry of Commerce.
It’s unclear whether any of NOL’s potential merger partners would now be interested in acquiring the Singapore shipper. Hapag-Lloyd, a German-Chilean company since a merger last year with Chile’s Compania Sud Americana de Vapores SA, VAPORES -2.44 % is planning an initial public offering that could value the world’s fourth-biggest container shipper at more than $5.5 billion.
The potential sale of NOL, which operates globally under the APL brand, was made easier when NOL sold its profitable logistics business, APL Logistics Ltd., for $1.2 billion to Japan’s Kintetsu World Express Inc. 9375 0.36 % in May. Selling the logistics and container-shipping operations separately is likely to bring Temasek a better price than selling them together, because the two sides attract different buyers.