[300621.EN.SEA] Privatisation of HMM Still On: Korean Development Bank Confirms

 

OFFICIALS of the Korea Development Bank (KDB), reported to be the largest investor in HMM as a bondholder, has confirmed they are in discussions exploring a sale of their stake in shipping giant.

The move is part of a plan to privatise some of South Korea's large industrial companies to enhance their competitiveness.

Speculation over a deal began in January 2021 and its timing could be tied to the strong rise in HMM's valuation as the container shipping industry recovered in the past year, reports The Maritime Executive, Fort Lauderdale, Florida.

The Korea Times, quoting the chairman of KDB, Lee Dong-gull, said the bank was exploring the acquisition of the bank's investment in the shipping company with a Korean conglomerate. According to the news outlet, KDB would structure the deal in several stages, including a conversion of the bonds into equity in the company, which would reportedly give the bank a 25 per cent stake in HMM.

KDB reported that it is currently undertaking a comprehensive review with officials of the Korean government as they explore a possible sale of the shipping company.

In January, the Korean media reported that steel company POSCO was the possible buyer of the shipping company and that the bank was beginning the review of a comprehensive restructuring plan for HMM. Bank officials, however, denied that any specific company has approached them at this point about a possible acquisition of its stake in HMM.

Hyundai recorded the highest quarterly operating income in the history of the company during the first quarter of 2021. Revenues nearly doubled to over US$2 billion and operating income rose from a small loss a year ago to over $900 million in the first quarter of 2021.

If the bank proceeds with the privatisation of HMM, it would be their second major effort to strengthen the maritime industries through mergers. KDB was the driving force between the proposed acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) by Hyundai Heavy Industries. Announced in 2019, that deal remains bogged down waiting for regulatory review from the EU, Korea, and Japan.

Source : HKSG / Photo : Maritime Business World.