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Yang Ming resumes stock trading, restructuring plan under way

Under pressure Taiwanese liner Yang Ming resumed stock trading today following its decision to suspend trading on April 20 to roll out a capital restructuring plan.

The first step of the company’s recaplitalision plan has decreased Yang Ming’s share count by about 53% from 3bn to 1.4bn, and the company will be receiving a new round of capital injections from various government and private entities. The liner said it would reveal the identity of the investors next month.

Analysts at Alphaliner estimate that Yang Ming requires at least $300m in equity injections within the next 12 months to avoid a liquidity crunch unless it can reverse declining revenues.

Yang Ming said that the primary goal for the company this year is to get back to profit and it has seen a notable increase in freight rates on the transpacific.

The company said it forecast the global box fleet growing by 3.4% this year while it anticipates demand growth of just 1.7% for 2017.

Since Yang Ming suspended its stock trading, there have been numerous reports expressing concerns about the company’s financial status, despite the company releasing an announcement to clarify its financial status is fine.

Earlier this year, Drewry Financial Research Services compared Yang Ming to defunct Hanjin.

“Yang Ming’s high debt is a great cause for concern for us given the heightened financial risks. Even with recovery in the underlying freight market, the debt burden without a restructuring is a red flag and a clear sell signal for us,” Drewry said in a report from January.

In April, a spokesperson for Yang Ming said the company had never considered the possibility of merging with another operator or selling to another line. Both Yang Ming’s size and recent financial results have led to many speculate it was a strong contender to be next up in container shipping’s huge era of consolidation.

The share price of Yang Ming closed at NT$13.3 today, up a little over 1%.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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