16 July
WSJ : TEMASEK SAID TO PUT NEPTUNE ORIENT LINES UP FOR SALE
20 July
Neptune Orient Hasn’t Made Any Decision on Potential Sale of Co.
NEPTUNE ORIENT LINES SHARES RISE 9.1% AT OPEN IN SINGAPORE
Bond prices crash !
Bond price of NOL 4.4% 11/2019
For one thing, Temasek is AAA and currently owns 66.87% of the company and the popular belief is that Temasek would not give up on NOL just like they would not give up on PSA.
The likelihood of a AAA rated acquirer is, at best, low.
A bit on NOL bonds for those holding on to the papers and I suspect there are quite a few members of the public involved because their very last issue back in Oct 2012 was sold mainly to private banks.
NOL 4.4% 11/2019 Deal Stats
By investor type: PRIVATE BANKS 78%, ASSET MGRS 18%, BANKS & OTHERS 4%.
By geography: SG 84%, HK 8%, others 8%.
I did not have anything good to say about this company back in 2012 although it has nothing to do with this potential Temasek sale.
“I stand by my view in April. I have no loyalty to a company that has no loyalty to their bondholders” https://tradehaven.net/market/new-issue-review-neptune-orient-lines-4-5-nol-7y-nc-5y/
Let us examine their outstanding issues and see who the lucky and unlucky bond holders are.
The 2 issues launched in 2012 are the lucky ones ! because they carry a Change of Control coupon step up of 1.5% if the bonds are not called within 60 days of a change of control event. This step up was not retrospectively applied to the older issues.
Let’s take a look at the company again for the grievances I had back in 2012.
2012 : “NOL said on Oct. 25 it expects to post a full-year 2012 loss after losing money in the first two quarters. In fact, it has lost money 2 out of the last 3 years.”
2015 :Lost money 4 years running now….. excess capacity and the emergence of mega container ships although the market is turning around this year on asset appreciation.
2012 : “NOL has just disposed of their HQ building for $380 million to Fragrance group.”
2015 : “17 Feb (Bloomberg) — Kintetsu World Express Inc., the Japanese freight company, said it’s buying Neptune Orient Lines Ltd.’s logistics business for 144.2 billion yen ($1.2 billion) as it expands the business.”
2012 : “For an unprofitable company, their long term liabilities have TRIPLED in the past 5 years (in fact, more if you count 2012). What do they need the money for ? They are burning cash.”
2015 : Nearly seven-fold (septuple) in long term liabilities 2007-2014.
For Bondholders
There is nothing much to do. I am hearing that there are few bids out there so you cannot sell out anyway and besides, the company is not in distress or anything like that.
And do not envy the shareholders because if you had bought their stock in 2012 (when their last bonds were issued), there is a high chance you will be sobbing over your 25%, or thereabouts, loss.
