(The Loadstar) – Trading in the shares of embattled Taiwanese carrier Yang Ming were suspended on the Taipei stock exchange yesterday to allow the company to reduce its equity capital by over half.
The suspension is due to last until 4 May, as it decreases its share count from three billion to 1.4bn, a decline of 53%.
In a brief statement to the stock exchange, the company said the action was “making up losses”.
There won’t be any reduction in the company’s overall market capital, however, with the 1.4bn shares trading at NT$13.15 (US$0.4) compared with the current price of NT$6.15.
Since the turn of the year, Yang Ming has sought to reassure investors and customers it was heading towards financial security, with the Taiwanese government set to inject US$1.9bn and another US$54m to be raised in a rights issue with six Taiwanese investors.
This was accompanied by drastic salary cuts at the top level, with senior executive salaries reduced by 50% and line managers by 30%.
However, as The Loadstar has previously reported, these measures may not be enough to return Yang Ming to profit this year. Such is the depth of its debt and the strain its gearing – which reached 457% at the end of last year, according to Drewry Financial Research Services (DRFS) – puts on its balance sheet.
DFRS noted: “We reiterate our view that, despite the current capital reduction and the government’s bailout package, which is targeted towards rescuing the entire local industry and not just Yang Ming, the measures undertaken may seem insufficient unless Yang Ming raises more equity.”
And it added: “Despite a better outlook for freight rates in 2017, we believe high cost structure coupled with debt burden will keep Yang Ming in the red in 2017.
“Profitability can only be restored by a meaningful restructuring, driven by asset sales, debt restructuring and a large fresh capital infusion.”
DFRS valued the share price at NT$3.50.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
A Russian Navy frigate equipped with new generation hypersonic cruise missiles has conducted drills in the English Channel and is carrying out tasks in the Atlantic Ocean, Russian news agencies reported on Tuesday.
(Bloomberg) — Chinese lawmakers got a head start on the US election this week as they gathered to vote on the largest fiscal package since the pandemic. But now that...
by Ossian Shine, (Reuters) – Germany’s Red Bandit, skippered by Carl-Peter Forster, was crowned winner of the 45th Rolex Middle Sea Race, becoming the third German yacht to win the prestigious offshore challenge. Following...
November 2, 2024
Total Views: 1669
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.