Korean gov’t to review sale of HMM, country’s sea flag carrier

[Source : HMM]

The South Korean government plans to review the privatization of the country’s largest shipping company HMM Co., raising the possibility of putting it up for sale this year, five years after it was placed under state ownership.

The Ministry of Oceans and Fisheries said on Wednesday that it will jointly seek consulting to review the feasibility of selling the government’s 70 percent stake in the country’s sea flag carrier HMM and analyzing potential acquisition candidates in cooperation with related organizations such as Korea Development Bank (KDB) and Korea Ocean Business Corp.

The consulting will deliver a comprehensive report on whether it is appropriate to hand over HMM management rights to a private business and when the transfer should be made, the ministry said.

State-run KDB became the largest stake holder of HMM in August 2016 when the bank made a debt deal to save the troubled shipping company.

KDB and Korea Ocean Business Corp. (KOBC) each own 20.69 percent and 19.95 percent, respectively, in HMM. When their holdings in bonds with warrant and perpetual bonds that can be converted into equity are counted, their combined stake in the container shipping major amounts to 70 percent.

Cho Seung-hwan, minister of Oceans and Fisheries, hinted at the privatization of HMM in an interview with Maeil Business Newspaper last August.

HMM shares added 1.56 percent to trade at 19,550 won ($15.38) during mid-day session on Thursday.

The ministry also plans to come up with measures to stimulate private investment in ship finance by the second half of this year. Ship finance is mostly operated with public investment. The ministry also said it will boost the shipping capacity of national flag shippers by increasing their capacity to 100 million tons in 2023 and 120 million tons in 2027 from the current 93 million tons.

As part of efforts to vitalized regional economy, the ministry aims to invigorate the marine leisure tourism. Under a plan, southern coastal areas that link Busan, Yeosu, and Jeju would be created as a key marine leisure tourism belt.