The amended resolution states that 'the acquisition or disposal of right-of-use assets of vessel which is subject to the prior consent of the governing authority and the transaction amounts is within TWD30 billion (US$1.1 billion) is only for the vessel lease transaction conducted between the company and its subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 per cent of the issued shares or authorised capital'.
The change appears to have been made in preparation for fleet adjustments at a time when the industry is faced with frequent changes in service routes.
The budget authorisation was announced at a shareholders' meeting last week chaired by Wan Hai's President Tommy Hsieh and independent director Lai Rung-nian.
The two executives explained that due to current state of the industry it was necessary to seek the shareholders' authorisation to set aside a substantial sum to take advantage of business opportunities.
The company is primarily an intra-Asia carrier but with the recent spike in freight rates, has launched solo Transpacific and Asia-South America services.
In 2020, Transpacific and Asia-South America volumes accounted for just under 22 per cent of Wan Hai's revenue, but this has nearly doubled to 40 per cent in 2021 to date. Initially, Wan Hai offered Transpacific services by purchasing slots from other carriers, but illustrating how quickly markets can change.
Last year, Wan Hai earmarked $360 million to acquire second-hand ships and bought 11 vessels from the resale market; these vessels were mainly deployed to Transpacific services.