Yang Ming continues to raise capital

Yang Ming continues to raise capital

The Taiwanese carrier announced the recapitalization plan in late 2016 after a difficult year. Photo credit: Shutterstock.

Yang Ming Line has completed its second private placement, good for a $87.5 million capital infusion, as it makes another step toward more stability.

The capital injection from 257.7 million new common stock shares, at 10.18 New Taiwan dollar per share (about $0.34) is the third stage in the company’s recapitalization effort, which so far has raised $340.5 million. The completion of the private placements, and public offering, means that government-related investors will have a holding ratio of 45.07 percent, Yang Ming said in a release Friday.

The company in February raised $56 million in an earlier private placement. In November, Yang Ming announced it had raised $200 million after floating shares on the Taiwanese stock exchange. Yang Ming has $751 million in short-term loans due over the next 12 months, industry analyst Alphaliner reported in April.

The carrier’s future was the subject of industry speculation after its losses doubled in 2016 to $493.6 million, and trading in the company’s stock was suspended briefly less than a month later. Yang Ming said the suspension was a routine part of its recapitalization process.

The Taiwanese carrier announced the recapitalization plan in late 2016, after a difficult year in which it lost $491 million, almost double the company’s 2015 loss. The plan involved a reverse split of Yang Ming's then outstanding shares as well as a coordination of multiple rounds of private placements.

In January, the company said it could draw on a $1.9 billion fund created by the Taiwanese government to help its ailing shipping industry. Taiwan’s National Development Fund of Taiwan took a 6.39 percent stake in Yang Ming.

Yang Ming said in November that it had earned a $42 million profit on higher freight rates and an 11 percent bump in volume in the third quarter, after losses in the previous 10 quarters.

The carrier is a member of THE Alliance along with Hapag-Lloyd, MOL, NYK Line, and “K” Line. THE Alliance, seeking to shore up shipper trust following the Hanjin Shipping bankruptcy, is unique among international vessel-sharing agreements in that its members have set up an emergency fund to ensure that ships are worked and cargo is delivered, should a member slip into insolvency.

Contact Hugh R. Morley at Hugh.Morley@ihsmarkit.com and follow  him on Twitter: @HughRMorley_JOC.