Courage Marine, the dry bulk shipping firm whose shares will start trading on Hong Kong's stock exchange tomorrow, may soon need to raise funds for a fleet expansion plan.
The Singapore-listed company's chairman, Hsu Chih-chien, did not elaborate on the scale of the possible fleet expansion or the amount of capital it would require. But apart from bank loans, another obvious channel to raise funds would be issuing new shares.
That, however, will not be possible in the next six months, under local listing rules.
Courage has listed its shares on the main board by way of introduction, meaning local investors can only trade shares already listed in Singapore. The company had considered listing new shares but dropped the plan amid poor market sentiment and a dismal outlook for the shipping industry following the natural disasters in Japan and the political turmoil in the Middle East.
Hsu said he expected the company's performance to improve in the second half of the year and that the poor operating environment at present offered just the right opportunity for the company to acquire more vessels. 'Two years ago, a new vessel would cost more than US$100 million, now it's just about US$50 million. Opportunities come in bad times.'
While all nine vessels that Courage owns are second-hand, Hsu said management was debating if the company should continue to buy old vessels or build its own ships.