The Wall Street Journal has reported that state investment company Temasek Holdings is selling Neptune Orient Lines Ltd (NOL), which was founded in 1968 as Singapore’s national shipping line.

Temasek owns 65% of the shares in NOL, with the remainder traded on the Singapore Stock Exchange.

The US$1.7 billion shipping company is not in a good shape: WSJ describes it as “heavily indebted” and “money losing”. Sources told the paper that the company had been shopped to prospective buyers in recent months.

In May this year, NOL sold its logistics business APL Logistics Ltd. to Japan’s Kintetsu World Express Inc for US$1.2 billion. This, WSJ reports, makes it easier for Temasek to sell the container-shipping operations.

The shipping industry has been under pressure to consolidate due to overcapacity. NOL operates 92 vessels servicing over 160 ports, making it one of the world’s largest shipping companies, but it has lost money for three years in a row as oversupply caused a fall in freight rates. According to WSJ, the company lost US$260 million, a large increase from the loss of US$76 million the year before.

NOL’s sale would mean an exit from the container-shipping business for Temasek. However, it continues to own PSA International Pte. Ltd., Singapore’s port operator.

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