Kang Seok-hoon Faces Challenges in Selling HMM as Potential Acquirers Show Indifference

KDB Industrial Bank Chairman Faces Challenges in Selling HMM

Kang Seok-hoon, chairman of KDB Industrial Bank, has initiated the process of selling HMM, but the task may not be as straightforward as he anticipated. Potential acquirers, who are being considered due to their ability to pay a high price, are showing a lukewarm response to the acquisition.

According to the Korea Development Bank, preliminary bids for the sale of HMM management rights will be accepted until August 21. Subsequently, a preferred bidder will be selected through the final bidding process.

Despite Chairman Kang’s confidence in the sale, the companies that are considered frontrunners for acquiring HMM are not actively expressing their interest. Hyundai Motor Group, POSCO Group, CJ Group, and LX Group have been mentioned as potential acquisition companies. However, some of these companies have already indicated that they are not considering a takeover due to the substantial financial investment required.

Chairman Wu Oh-hyun of Samramidas Group has expressed interest in acquiring HMM even before the sale is finalized. However, doubts persist on whether SM Group would be a satisfactory purchaser for the Korea Development Bank.

KDB Industrial Bank’s Chairman Kang hopes that an entity with a willingness to contribute to the development of Korea’s shipping industry and the financial capability to manage the company will take over HMM.

Concerns Regarding Permanent Bond Conversion and Sale Completion

In order to ensure the completion of the sale, Chairman Kang may need to address the issue of permanent bond conversion to favor the potential acquirer. The Korea Development Bank and the Korea Maritime Corporation hold convertible bonds and bonds with guarantees totaling 2.68 trillion won issued by HMM.

If these bonds are converted into stocks, the selling price of HMM would increase, thereby burdening the potential acquirer. The Korea Development Bank has indicated that it will gradually convert the remaining permanent bonds and handle convertible stocks in consultation with the acquirer to minimize market impact.

The sale of HMM carries significant importance as it is among the restructuring companies managed by the Korea Development Bank. Despite the challenges faced by Chairman Kang in finding a new owner, he remains optimistic about the possibility of reaching a stock purchase agreement within the year.

[비즈니스포스트] Kang Seok-hoon, chairman of KDB Industrial Bank, has started taking steps to sell HMM within this year.

However, there is a possibility that it will not be easy for Chairman Kang to sell the company, as companies that are considered as potential acquirers at the high sale price also show a negative reaction.

Kang Seok-hoon, tough road to find a new owner” height=”150″ src=”width=”300″ /> ▲ Kang Seok-hoon, chairman of KDB Industrial Bank (pictured), started the process of selling HMM, but it seems that finding a new owner will not be easy due to the indifference of big fish acquisition companies. <연합뉴스>

According to the Korea Development Bank on the 21st, preliminary bids for the sale of HMM management rights will be accepted for one month until August 21, and a preferred bidder will be selected through the final bidding process.

Chairman Kang has shown confidence in HMM’s sales.

Chairman Kang has expressed his ambition to sell HMM quickly because it is a company that is already on track to normalize business among the restructuring companies managed by the Korea Development Bank.

In a press conference held on June 20, the first anniversary of his inauguration a month ago, he explained, “The sales advisory company is tapping (contacting) a number of strategic investors about their intention to acquire it, and if the sale operation is carried out without restriction, it is expected that it will be possible to reach a stock purchase agreement (SPA) within the year.”

However, contrary to Chairman Kang’s expectations, it is a problem that the companies that are on the rise as candidates for the new owner of HMM are not actively expressing their intention to acquire it.

Inside and outside the industry, Hyundai Motor Group, POSCO Group, CJ Group, and LX Group are cited as acquisition companies for HMM.

The Korea Development Bank is also said to have asked these companies for a takeover last year, but some companies have already drawn the line that they are not considering a takeover at all.

An official from a company considered as a potential acquirer said in a phone call with the Business Post, “It will be difficult for anyone to make an easy decision because it takes so much money to acquire it.”

Samramidas Group (SM) Chairman Wu Oh-hyun expresses his intention to acquire HMM even before the sale is formalized, but it is doubtful whether SM Group will be a satisfactory acquirer for the Korea Development Bank.

In the market, there is a ‘shrimp swallowing a whale’ appraisal of the situation where SM Group, which is smaller than HMM, aims to take over HMM.

Korea Development Bank sold Daewoo Shipbuilding and Marine Engineering to Hanwha Group and selected Hana Financial Group as the preferred negotiator for KDB Life Insurance.

Chairman Kang also said in a press conference on the first anniversary of his inauguration, “I hope that an entity with a company’s will to contribute to the development of Korea’s shipping industry and the ability to send money and control management will take over.”

Kang Seok-hoon, notice on the difficult road to find a new owner” height=”150″ src=”width=”300″ /> ▲ It seems likely that Kang Seok-hoon, chairman of KDB Industrial Bank, will adjust the permanent bond conversion issue to the best advantage of the acquirer in order to complete the HMM sale. Pictured is an HMM cargo ship. < HMM>

Accordingly, it seems likely that Chairman Kang can adjust the permanent bond conversion issue to the most favorable conditions for the acquirer to complete the sale.

The Korea Development Bank and the Korea Maritime Corporation hold 2.68 trillion won in convertible bonds and bonds with guarantees issued by HMM.

If the convertible bonds and guaranteed bonds held by the Korea Development Bank and the Korea Maritime Corporation are converted into stocks, the selling price of HMM rises, increasing the price burden on the acquirer.

The Korea Development Bank announced the start of the sale process on the 20th and expressed its position that it would gradually convert the remaining permanent bonds.

KDB said, “We will decide whether to convert the remaining perpetual bonds step by step according to the exercise of HMM’s redemption rights, and convertible stocks will be handled in consultation with the acquirer in a way that minimizes the impact on the market.” Reporter Cho Seung-ri

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