Wednesday, February 18, 2015

NOL

NOL: Confirmed it had reached a deal to sell APL Logistics to Japanese cargo carrier Kintetsu World Express for ¥140b (US$1.18b). This is higher than previous valuations of between US$750m and US$1b that the liner hoped to raise from the sale.

The transaction values APL Logistics at 14.8x EBITDA and 4.9x P/B, which is a premium to Australia's Toll Holdings at 1.61x and Qube Holdings at 1.96x. Based on the book value of its logistics assets, NOL is expected to reap an estimated net gain of US$939m, which translates to a surplus of US$0.362 per share.

If successful, the sale would shore up its balance sheet and pare its net gearing from current 2.25x to 1.08x, but leave the group with its loss-making liner business.

Post sale, NAV will rise from US$0.67 to US$1.02 ($1.38), implying a valuation of 0.72x P/B, at the low end of the 0.8-0.9x P/B range for global liners.

NOL will resume trading today at market open.

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