Loss-making NOL sells APL Logistics for $1.6b

In a bid to boost its balance sheet.

Neptune Orient Lines revealed that it is selling its logistics arm, APL Logistics, to Kintetsu World Express for $1.6b (US$1.2b).

The sale is a bid to boost NOL’s balance sheet, and the move comes a few days after the shipping group posted its third consecutive year of loss in FY14.

“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, Group President and CEO of NOL.

The net proceeds of the sale will be applied to strengthen its financial position, including to repay its borrowings. The transaction is still subject to NOL shareholder and relevant regulatory approvals.