Credit Suisse cuts Neptune losses
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Singapore shipper Neptune Orient is the world's No. 6 container line.
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SINGAPORE (Reuters) -- Credit Suisse Group, which ended up with 20 percent of Singapore shipping firm Neptune Orient Lines after a poorly received equity deal, has moved to cut its stake, realising millions of dollars in losses.
In a series of statements to the Singapore stock exchange Tuesday, the group's investment bank, Credit Suisse First Boston International (CSFB), said it sold about two thirds of its stake, or 153.17 million shares, at S$2.24 for S$343.1 million ($199 million).
This amounted to a loss of about $7.1 million.
The sale left CSFB with around 6.42 percent of the world's sixth-largest container shipping line, which is one-third owned by the Singapore government's investment agency, Temasek Holdings.
CSFB was left with the large stake in the shipping group when it underwrote the $308 million cash call at a price of S$2.32 a share, which was at a 4.9 percent discount to the last traded price of S$2.44 before the share sale announcement.
NOL shares were up three cents at S$2.06 in Tuesday afternoon trade.
Up until the share sale, NOL stock had more than doubled in price from the start of the year, compared to a 30 percent gain in the benchmark Straits Times index
Investors resisted the stock at the offer price and CSFB took the 236 million new NOL shares onto its books on November 10.
CSFB said that four days later on November 14 it sold 153 million, or 65 percent, of the new shares at S$2.24 each.
As part of its dealings to offload the stock, CSFB said it had sold one parcel of 56,000 shares at prices ranging from S$2.09 to S$2.13. At the same time various CSFB affiliates had bought 5.2 million at prices ranging from S$2.07 to S$2.13.
"It looks like the traders have taken over from the bankers and they are trading out the position," said an investment banker with a U.S. firm.
A CSFB spokeswoman said the bank does not comment on its trading positions.
Overall the loss from the sale of the placement shares have more than wiped out the one percent, or $3.1 million, underwriting fee on the underwriting deal.
Credit Suisse said it currently holds 101.95 million shares or 7.16 percent of NOL, including both the new stock and shares held previously by the bank's asset management units and other affiliates.
"We are comfortable with the (NOL) position. We think highly of the of the company and we intend to hold our stake for a longer term," the CSFB spokeswoman said.
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
