Hot stock: NOL rises on planned divestment of APL Logistics

SHARES in Neptune Orient Lines (NOL) climbed to a high of S$1.065 in early trading on Wednesday on the news that it plans to divest its logistics business.

At around 9.40am, the stock was the most heavily traded one by volume with more than 14.7 million shares changing hands. The counter closed at 99 Singapore cents on Tuesday.

In an announcement on Tuesday after the market closed, NOL said that it would sell APL Logistics to Japanese logistics company Kintetsu World Express for about US$1.2 billion.

NOL said that the sale would help strengthen the group's financial position - including repay its borrowings - as well as allow it to focus on its core liner shipping business.

For the financial year ended Dec 26, 2014, APL and its subsidiaries contributed about US$1.66 billion in revenue to NOL and US$80 million in core earnings before net finance expense, tax, depreciation and amortisation (core Ebitda).