Hubline ... Oct09

HUBLINE Bhd, a major regional container line, is expected to raise up to RM124 million via a proposed rights issue to fund its expansion plans.

The group is actively exploring opportunities to grow and expand its market share in the shipping industry. For this purpose, the group intends to purchase two to three vessels, either in the container or dry bulk shipping business.

With a fleet size of around 40 vessels in container and dry bulk shipping, HUBLine has been operating in all the intra-Asian ports for the past 16 years. In Malaysia, HUBLine has eight container vessels providing weekly service to East and West Malaysian ports, and also provides a dry bulk shipping service with its 18 sets of tugs and barges. The company also owns a terminal port in Thailand via an associate company listed on the Thai Stock Exchange.

HUBLine focuses on a niche market serving smaller ports in the intra-Asian trade routes from Papua New Guinea, China, Hong Kong, India, Indonesia, Malaysia, Vietnam, Thailand, Cambodia, the Philippines, Singapore and Brunei.

The company is offering a rights issue of up to 621,676,421 new shares together with up to 621,676,421 new detachable warrants at an issue price of RM0.20 per share.

This is at an attractive discount of 28 per cent to its theoretical ex-rights price. The right issue is on the basis of one rights share with one warrant for every two ordinary shares held in Hubline. The warrants may be exercised at any time within 10 years commencing from the date of issuance and will also be listed and traded on Bursa Securities. The book closing is expected to be announced soon. The acceptance and payment is planned to be completed by next month (Oct 2009).