Neptune Orient Lines (NOL) has sold its profitable APL Logistics for US$1.2 billion to Japanese airfreight forwarder Kintetsu World Express (KWE) in order to concentrate on lifting its loss-making container shipping arm APL.
“This is a strategic move that will allow us to focus on improving our liner shipping business, while at the same time enabling APL Logistics to grow. The transaction will also strengthen our balance sheet and unlock value for our shareholders,” said Ng Yat Chung, NOL group president and CEO.
In a joint statement, NOL said that net proceeds from the sale of APL Logistics will be used to strengthen its financial position, pay off its loans, and allow APL Logistics to realize its full potential.
“The proposed transaction with KWE is expected to provide APL Logistics with the opportunity to expand its business with the backing of a company with strong fundamentals and a commitment to grow in the logistics space. We believe that KWE has the ability and the ambition to continue APL Logistics’ growth strategy,” continued Ng.
Satoshi Ishizaki, group president and CEO of KWE, said the sale is aligned with the group’s expansion plans, especially in the trans-Pacific region.
“We are very pleased to successfully enter into this transaction. Since 2013, we have laid out a strategy to strengthen our international presence especially in the US and Asia. This transaction fits right into our strategy,” he added.
He further stated that they will keep the headquarters of APL Logistics in Singapore and run it as a separate unit, with plans to further invest in and expand logistics services.
NOL has been on a three-year losing streak with net loss amounting to US$260 million in 2014, largely due to the floundering performance of APL, even as its supply chain management business continued to post strong growth. The container-shipping business contributes nearly 85 percent of revenues, while its logistics arm makes up the remaining share.
Photo: Detlef von der Thüsen
