Taiwan International Ports Corporation (TIPC) is selling more of its holdings in Yang Ming Marine Transport to cash in on the rising stock price.
TIPC, which operates most of Taiwan’s ports, sold 119.5 million stocks last year, making a profit of US$104.37 million, a figure that was perceived as being too low. TIPC was criticised for not waiting for Yang Ming’s stock price to rise further.
On 10 June, TIPC applied to sell another 8 million stocks, which is expected to generate US$24.16 million.
TIPC chairman Lee Hsien Yi said that the organisation will hold on to 158.9 million shares to remain Yang Ming’s third largest shareholder.
TIPC expects to continue earning dividend income from its stake in Yang Ming. With zero cost, it is estimated that the dividends distributed next year will be higher than this year’s US$114.77 million.
In 2012, TIPC purchased Yang Ming’s convertible bonds for around US$137 million. Hsiao Ting-sun, who was the chairman of TIPC before ten years, said that Yang Ming, which back in 2012 reported poor profitability, was the organisation’s second-largest customer after Evergreen Marine Corporation.
Buying the bonds was TIPC’s way of helping Yang Ming and safeguard its own interests and the hub status of Kaohsiung port.
After Yangming’s capital reduction and capital increase, this corporate bond was converted into more than 191.9 million Yang Ming shares at a price of 75 cents per share last year. Additionally, TIPC participated in the state-sponsored recapitalisation of Yang Ming in 2017 and bought 119.5 million shares at a unit price of 36 cents.
Lee said that when TIPC first sold Yang Ming shares, it was inexperienced in stock speculation, adding that the organisation had since learnt from the experience, executing the latest stock sale after the stock price rose to an attractive level.
Martina Li
Asia Correspondent
