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Yang Ming suspends stock trading through to May 4

Under pressure Taiwanese containerline Yang Ming Marine Transport Corporation has suspended stock trading through to May 4, during which time it is set to reduce its equity capital to the tune of ~53%.

Yang Ming, the world’s ninth largest boxline and the subject of intense speculation on its future over the past year, will decrease its number of shares to 1.4bn from 3bn.

The announcement is a follow-up of the company’s extraordinary special shareholders’ meeting on December 22 last year, which resolved to reduce its share capital. The capital reduction plan follows on from many quarters of consecutive losses.

A report from Drewry Financial Research Services (DFRS) earlier this year showed Yang Ming is the most leveraged among all container operators covered by the analyst.

Yang Ming has this year said it will dip into Taipei’s $1.9bn shipping assistance package, while it has found six investors to come in with an additional $54m of supporting capital.

Pay among senior management at the Keelung-headquartered line has been slashed by 50%, while line managers have seen their salary cut by 30%.

“Yang Ming’s balance sheet looks worrisome at the end of FY16,” DFRS said in a research note today with the analyst suggesting the line’s share price does not represent its fundamentals.

DFRS urged Yang Ming to do more to right its financial position.

“Profitability can only be restored by a meaningful restructuring driven by asset sales, debt restructuring and a large fresh capital infusion,” DFRS maintained.

A spokesperson for Yang Ming defended the line’s actions in a recent interview with Splash, noting the improved results in the fourth quarter of last year and a solid improvement seen in the first quarter of 2017.

“In addition to the measures that have been taken, we will keep doing everything to enhance the operation performance, so a significant improvement is predicted in the future ahead,” the spokesperson said, refuting fevered speculation that the line was next on the block in container shipping’s great era of consolidation.

“Yang Ming never considered the possibility of merging with another operator or selling to another liner,” the spokesperson stressed.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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