Yang Ming¡¯s board of directors has approved on 6 May 2020 a private placement for 300 M preferred shares in the company to raise additional capital for the Taiwanese carrier.
Yang Ming¡¯s net loss reached NTD 4.31 Bn ($144 M) in 2019 and NTD 6.59 Bn ($220 M) in 2018, with its shareholders¡¯ equity ping by 36% in the last two years to just NTD 17.1 Bn ($571 M) at the of 2019.
Taiwan Ratings Corp. had earlier downgraded Yang Ming¡¯s debt ratings from ¡®s¡¯ to ¡®negative¡¯ on 14 April due to the weak global trade conditions that ¡°could materially weaken the company¡¯s operating performance this year and beyond.¡±
The pricing for the preferred shares has not been determined. According to company filings, the preferred shares will only be listed three years after they are issued.
The Taiwanese government owns about 48% of Yang Ming¡¯s shares and is expected to fund the new share offering.
Yang Ming¡¯s move to seek fresh government financial support follows HMM who received KRW 720 Bn ($591 M) in April from South Korean government owned entities who had raised their shareholding in the Korean carrier to 74%.
Both Yang Ming and HMM are set to raise their capacity operated in the next two years, with Yang Ming set to receive 14 new ships of 12,000 teu and ten ships of 2,800 teu in 2020-2022 while HMM will receive twelve new ships of 23,000 teu (two of which have been delivered in the past weeks) and eight units of 15,000 teu.
