Growing shipping company to put stock in local market

STX Pan Ocean Co., Korea’s largest carrier of bulk cargo, hopes to raise as much as 396.3 billion won ($427 million) by selling stock in its home country for the first time.
The Singapore-listed company lodged an application to sell 343.1 million new shares in Asia’s sixth-largest stock market, Korea Exchange Inc. said yesterday in an e-mailed statement.
“It’s a positive for the longer term,” said Thomas Kim, who rates the stock “overweight” as an analyst at Lehman Brothers Asia Ltd. in Hong Kong. The funds may “be used for capital expenditures,” he said.
The Seoul-based company plans to spend about $800 million to add 16 new vessels this year. Demand from China has helped cause dry-bulk shipping rates to more than double over the past year.
The shipper of grain and iron ore plans to replace older bulk carriers in its fleet of 300 ships; it also needs liquefied natural gas tankers before it begins shipping LNG for Korea Gas Corp. next year.
The company said in March it would initially finance its acquisitions through internal funds and bank loans. It expects to raise 358.5 billion won to 396.3 billion won from the stock sale, according to yesterday’s statement.
STX Pan Ocean’s fourth-quarter net income almost quadrupled to $97 million after it charged more to move cargo. Dry-bulk sales, which accounted for 89 percent of total revenue, rose 48 percent in the period from a year earlier to $765 million. That was helped by growing demand to ship iron ore to China from Brazil, as well as to Asian countries from Australia.
The Baltic Dry Index, a benchmark for bulk commodity shipping rates, rose to a record last week and is up 36 percent this year.
The company’s shares rose 1.8 percent to S$1.67 at the 5 p.m. close in Singapore. The stock has climbed 62 percent this year.