Temasek Holdings, a Singapore-owned investment company, has put up Neptune Orient Lines for sale, the Wall Street Journal reported Thursday, citing “people familiar with the situation.”
NOL, the parent of container shipping company APL, “has been shopped to prospective buyers in recent months,” the newspaper reported.
APL is ranked as the 14th largest container shipping line in the world, with 91 owned and chartered ships with aggregate capacity of 497,877 TEUs, by the information service Alphaliner.
The report follows the sale in May by NOL of APL Logistics
for $1.2 billion to Japan’s Kintetsu World Express.
A spokesperson for NOL told American Shipper
, “We have no comment” on the Wall Street Journal report.
Lars Jensen, chief executive officer and partner at SeaIntel Maritime Analysis, said the report follows rumors several months ago that the company was for sale and that Maersk Line, the world’s largest container shipping company had discussed a possible purchase.
“The only thing I can see that makes sense is if you get them at a bargain basement deal and get them for all the new ships,” said Jensen. “I’m not sure anybody, let alone Temasek would want to sell at such a low rate.”
Between the end of 2011 and the end of 2014, NOL added 29 ships to its fleet with an average capacity of 10,500 TEUs and a total capacity of 303,000 TEUs, according to an NOL presentation. That increased the company’s competitiveness as the rest of its fleet was made up of 67 ships with 271,000 TEUs, an average ships size of 4,000 TEUs. Before the new building program began, the company had 147 ships that averaged 4,300 TEUs of capacity.
"When the rumor was floated a few months back you could kind of make a case of saying Maersk needed to order more ships to prepare for their future growth," added Jensen. However, Maersk has recently made a raft of new ship orders, including 11 second generation EEE class container vessels
with a capacity of 19,630 TEUs each, with an option for six more in June, and nine additional 14,000-TEU average ships
One potential stumbling block to Maersk acquiring NOL is the fact that both Maersk and APL are big players in the U.S.-flag shipping business.
“I’m not sure the Federal Maritime Commission would look very favorably upon Maersk buying APL and suddenly getting monopoly on US government cargo on U.S flag ships,” said Jensen.
The NOL annual report says Temasek is deemed to be interested in selling the 1,067,612,171 ordinary shares held by its associated company and subsidiaries or 41 percent of the company’s 2,593,821,492 total shares.