KUALA LUMPUR: Singapore’s Neptune Orient Lines Ltd has proposed to raise S$1.43 billion or US$1 billion from a proposed rights issue of 1.1 billion rights shares.

NOL announced to the Singapore Exchange on June 2 that the rights shares issued would be on the basis of three rights shares for every four existing rights  at S$1.30 per share, which is a 15% discount to the closing price of S$1.53 as at May 29.

“Based on the existing share capital of NOL, the estimated gross proceeds arising from the rights issue will amount to S$1.437 billion,” it said.

NOL added that after deducting estimated expenses of about S$36 million, the estimated net proceeds will be about S$1.401bilion.

NOL said of the net proceeds; about 50% will be used to repay debts; and the balance will be used for investments (if opportunities arise); and/or general corporate and working capital purposes, and/or further repayment of debts.

It said the current stock market was conducive for the proposed rights issue as the stock market has improved recently (NOL shares closed at S$1.53 on May 29).

NOL added that Temasek had given an irrevocable undertaking to subscribe for its pro-rata entitlements under the proposed rights issue and

agreed to sub-underwrite the entire proposed rights issue in consideration for a commitment fee of 1.75% on the pro-rata subscription and a sub-underwriting fee of 2.25% on the full back-stop commitment (less the pro-rata subscription).