The sale of HMM, formerly known as Hyundai Merchant Marine, is facing delays beyond the initial expectations. Korea Development Bank (KDB) is currently continuing its evaluation of eligible buyer candidates, a process it had aimed to complete within this month.
According to financial industry sources on Aug. 31, KDB has not yet provided the results of the eligibility evaluation to the participants in the preliminary bidding for HMM, which included Harim, Dongwon, LX, and German shipping company Hapag-Lloyd. KDB had initially set plans to finish the evaluation of potential buyer eligibility by the end of this month following the closure of preliminary bidding on Aug. 21.
As a result, there was an expectation that KDB would inform the bidding companies of the evaluation results on this day. With KDB’s evaluation taking longer than anticipated, however, it appears that the sale schedule may also be delayed.
An official from a bidding company stated, “We have not received the evaluation results today,” and added, “(The notification of evaluation results) may be delayed until tomorrow or Monday.”
The reasons for the delay in KDB’s evaluation have not been disclosed. However, concerns have been raised about the financial conditions of the bidding companies that came to light after the close of preliminary bidding. The sale price of HMM is estimated to be around 6 trillion won, and excluding Hapag-Lloyd, the remaining companies have cash holdings of up to approximately 2.4 trillion won, making it difficult for them to bear the selling price.
In the actual results of the preliminary bidding, it has been confirmed that Harim, Dongwon, and LX have teamed up with financial investors (FIs). Harim formed a consortium with private equity fund (PEF) manager JKL Partners and then brought in major banks such as Woori Bank and Kookmin Bank as lead financial supporters. Dongwon is reported to be arranging acquisition funds through the sale of stakes in its major subsidiaries or asset liquidation. LX has selected Samjong KPMG as its advisory firm and is formulating an acquisition strategy.
There are observations in some quarters that Hapag-Lloyd has been excluded from the eligibility evaluation. It is reported that disqualification reasons arose in the part of the evaluation criteria related to the advance of the domestic shipping industry. In particular, concern about the potential leakage of critical business information if Hapag-Lloyd were to participate in the due diligence process was a significant factor.
Source: Businesskorea
