The capital increase, which is expected to amount to $414 million, will be used to reduce debt, the German ocean carrier said in a statement Thursday.
Following the Hapag-Lloyd’d merger with ASC, finalized in May, the German ocean carrier will carry out a capital increase via a new share issue that is expected to bring in 352 million euros (U.S. $414 million), the company said in a statement Thursday.
The funds will be mostly used to reduce debt, with the remainder going towards general corporate purposes, Hapag-Lloyd stated.
“Following the successful merger with UASC, we will use the capital increase to strengthen our capital structure and to use the proceeds to reduce the leverage of the company. This enables us to focus on enhancing our strategic and operating objectives,” Hapag-Lloyd CEO Rolf Habben Jansen said of the move.
The company’s share capital of 164,042,940 euros will increase by 11,717,353 euros to a total of 175,760,293 euros. The ocean liner will issue 11,717,353 new, no-par shares in exchange for cash while maintaining the shareholders’ subscription rights, Hapag-Lloyd said.
“The proportionate amount of the share capital attributable to each new share is EUR 1.00. The new shares became eligible for dividends on 1 January 2017 and shall be offered to all shareholders at a subscription price of EUR 30.00 and a ratio of 14:1 per share,” Hapag-Lloyd said.
The subscription period for the shareholders is expected to start on Oct. 2 and end two weeks later on Oct. 16.
According to Hapag-Lloyd, the capital increase is backed by primary shareholders CSAV Germany Container Holding GmbH, Kuehne Maritime GmbH, Qatar Holding Germany GmbH and The Public Investment Fund of the Kingdom of Saudi Arabia.
In August, Hapag-Lloyd announced a $55 million net loss for the first half of 2017. The carrier noted that the loss was part of the “one-off effects related to the UASC transaction.”