Korea Development Bank (KDB) has initiated the privatisation process of South Korean carrier Hyundai Merchant Marine (HMM).
KDB and Korea Ocean Business Corporation (KOBC), HMM’s two largest stakeholders, have announced plans to form an advisory group to sell the government’s interest in the shipping line.
The two companies aim to select one firm each for divestment, accounting, and legal affairs to form the advisory group by 22 March.
As HMM’s market capitalisation is about KRW11 trillion ($8.4 billion), the price of the combined 40.65 per cent stake put up for sale is expected to exceed KRW4 trillion ($3 billion).
Currently, KDB and KOBC hold 20.69 per cent and 19.96 per cent stakes in HMM, respectively, while two other state institutions, National Pension Service and Korea Credit Guarantee Fund, bring the government’s interest to 52 per cent.
These institutions also hold convertible bonds that are set to mature this year, and if converted to stocks, could increase the state’s interest to 74 per cent.
HMM has been under state control for almost seven years since the company’s liquidity crisis in 2016. During this time, the company managed to renegotiate its long-term charters, which allowed its creditors, led by KDB, to convert their debts into equity.
The firm’s operating profit also logged an all-time high of KRW9.94 trillion ($7.6 billion) last year.