Harim Group secures $2.5 bn for HMM acquisition through Pan Ocean

[Courtesy of Harim]

In the race to acquire South Korea’s largest sea carrier HMM Co., one of the contenders, Harim Group, reportedly secured a substantial cash reserve of 3.25 trillion won ($2.48 billion) via its shipping unit, Pan Ocean Co.

According to an unnamed investment banker familiar with the group on Thursday, Pan Ocean obtained the funds by issuing perpetual bonds, valued up to hundreds of billions of won, and liquidating assets, including vessels. This adds to the 1.8 trillion won it previously secured by selling securities and utilizing other liquid assets.

The South Korean poultry conglomerate has actively pursued fund-raising via various channels. In mid-October 2023, it divested its entire 5.8 percent stake (3,903,973 shares) in Hanjin Kal Corp., held by Pan Ocean, for 162.8 billion won.

Market insiders estimate the price for the 398,790,000 shares (57.9 percent stake) in HMM to be in the 5 trillion to 7 trillion won range. With the 3.25 trillion won secured, Harim Group has effectively secured around half of the funds it needs for the acquisition.

The group is also expected to secure a further 600 billion won through a consortium with domestic private equity fund (PEF) operator JKL Partners Inc. Harim Group has also garnered support from major financial institutions for the acquisition financing, including Shinhan Bank, KB Kookmin Bank, Woori Bank, NH Investment & Securities Co., and Mirae Asset Securities Co.

The size of the acquisition financing is expected to be flexible, depending on the final acquisition price, which is yet to be determined.