“K” Line sells new shares to raise capital

“K” Line sells new shares to raise capital

“K” Line sells new shares to raise capital

   'K' Line said Friday it would issue 110 million shares of common stock in the company in order to raise capital during a fiscal year in which it is expected to sustain heavy losses.
   The move follows the path of many of 'K' Line's competitors, who have issued shares, bonds and rights issues as a way to infuse cash into their businesses the past year. Others have needed to rely on government loan guarantees or bailouts. The container shipping industry is expected to have lost billions of dollars in 2009.
   The shares issue represents about 17 percent of 'K' Line shares currently in the market. The line said it would set a price for the new shares between Feb. 23 and Feb. 26.
   'Raising funds at this time is required for expansion of stable earnings base and sustainable growth through restructuring business portfolio,' the carrier said in a statement. 'While new investment in containerships is frozen until there is actual supply and demand balance, dry bulk business will be expanded in order to increase stable earnings source and further growth of car carrier fleet will be continued for strengthening car carrier business.
   'Moreover strategic investment in growth areas for energy resources development-related business, heavy cargo ships and logistics is being carried out for expansion of stable earnings base. In addition, execution of this stock offering and building up stable earnings will be able to strengthen its financial base against the present business environment. “K” Line will strive for stable earnings base and sustainable growth in both the medium and long-term through business restructuring and strengthening of its financial base.'