Yang Ming has said in a customer advisory aimed at mitigating concerns that its suspension of trading in the Taiwan Stock Exchange is part of a standard procedure for companies implementing recapitalisation.
The struggling Taiwanese carrier voluntarily suspended the trading of its stock on the exchange from April 20 to May 3 following the announcement in early 2017 of a recapitalisation plan to reduce its equity capital.
During the pause in trading, the company’s outstanding issued shares will be cut to around 1.4bn shares, with a new share value expected to be about twice the share price prior to April 19.
“While Yang Ming understands our customers have access to opinions and news from a variety of 3rd party sources, we hope our customers will appreciate and continue to rely on our candidness and transparency for the complete facts,” the company’s statement read.
“Our recapitalisation plan will initially allow Yang Ming to reduce its equity capital, after which infusion of new capital is then obtained from various private and public investors. At the appropriate time, we will also announce the identities of those new investors.”
The carrier said that its recapitalisation is part of a wider plan to improve its financial structure, including measures to increase operational efficiency and reduce cost, with a greater emphasis on raising the proportion of higher-revenue cargoes.
The company, which has access to government-backed funding of US$1.9bn, added that it effectively revamped its operational flowchart and optimised its financial structure and management.
“Recent improvements in the shipping sector, along with increased cargo volumes, have helped Yang Ming minimise its business loss for the 4th quarter of 2016 to NTD1.88bn (US$62bn), which is a sharp reduction from its loss in the previous quarter,” Yang Ming’s statement noted.
“We remain optimistic for continued improvements into the 1st quarter of 2017.”
According to Reuters, the carrier recently became the first shipping line to stop its services to Iran a year after international sanctions on the country were lifted.
A source by the news agency reportedly said that the company’s decision to halt its container service to Iran, where it called once a week, was related to concerns of rising tensions.
However, Reuters noted that it was unable to confirm independently whether this was due to new concerns over the country or changes at the Taiwanese carrier.