Dry bulk shipper Shih Wei Navigation Co (四維航業) yesterday announced plans to reduce its paid-in capital by 34 percent to NT$2.79 billion from NT$4.23 billion (US$95.58 million from US$144.9 million).
The company, which has ended the past nine quarters in the red, last year reported a loss of NT$2.14 billion, its filing with the Taiwan Stock Exchange showed.
In particular, losses in the fourth quarter widened due to the company’s decision to book NT$1.04 billion in asset impairments at its subsidiaries.
However, the company gave an upbeat outlook on earnings this year, as it is well-positioned to take advantage of an expected dip in global dry bulk shipping capacity due to more stringent environmental requirements.
The company has been upgrading its fleet to meet new rules that would require vessels to be equipped with ballast water filtration systems and newer engines that burn fuel with less sulfur.
Many of Shih Wei’s 61 vessels have undergone upgrades, while older ships with capacity of 8,000 to 10,000 twenty-foot-equivalent units would be retired, the company said.
A significant number of its competitors would not be able to bear the costs of the required upgrades, while many would not be able to make the transition in the near term, the company said, adding that the development would help normalize global supply and demand for dry bulk transport.
Many older vessels would be turned away from major ports as soon as next year, it added.
The company’s board also approved plans to raise capital by issuing no more than 100 million new shares at NT$10 per share, of which 75 to 80 percent would be made available to current shareholders, while 10 percent would be allocated for a public offering, and 10 to 15 percent would be reserved for employees.
The capital reduction and raising plans still have to be approved at the company’s annual shareholders’ meeting on June 27.
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