SINGAPORE - Neptune Orient Lines Ltd (NOL) has finalised the sale of its crude oil tanker unit to Malaysia International Shipping Corp Bhd. (MISC) for RM1.6 billion (US$445 million) in cash, officials said.

"This is a strategic move that will allow us to focus o­n our core container transportation and logistics businesses, APL and APL Logistics, while at the same time strengthening our balance sheet and unlocking value for shareholders," said NOL chairman Cheng Wai Keung.

MISC will also fund a US$75 million dividend from the sold unit, American Eagle Tankers (AET), to the Singapore-based NOL, according to a company statement issued late yesterday.

NOL said the enterprise value of the deal was RM3.8 billion, including the equity value, dividend and debt of AET.

The MISC is a subsidiary of state-owned oil company Petronas and o­ne of the world's leading liquefied natural gas (LNG) carriers.

Debt reduction

AET currently operates 29 tankers and two very large crude carriers, principally in the Gulf of Mexico and Atlantic basin.

Cheng said NOL was o­n track to returning to profitability this year.

"Given the freight rates we achieved and the cost savings, we will be profitable this year, barring any adverse circumstances," he said.

NOL expects to reduce its debt burden, with net gearing cut by approximately half following the sale.

"It would also significantly strengthen the group's balance sheet and enable resources to be focused o­n driving sustained profitability from our core capabilities in global container transportation and logistics," Cheng said.

NOL shareholders are expected to vote o­n the AET sale at the annual general meeting o­n May 28. AFP