LX, Harim, and Dongwon Group Race to Secure Funding for HMM Acquisition

LX, Harim, and Dongwon Group are ramping up their efforts to secure significant funds for the acquisition of HMM. The financing capabilities of these companies are considered crucial in the competitive landscape of mergers and acquisitions.

Market analysis suggests that the ability to secure financing plays a vital role as a pre-acquisition variable. HMM is estimated to have a sale price ranging from at least 5 trillion won to 8 trillion won. Considering that HMM’s market capitalization is around 8 trillion won, a minimum of 5 trillion won would be needed for the acquisition.

LX Group, known for its strong financial capabilities, is primarily focused on accumulating funds for the HMM acquisition. The group currently holds cash assets of approximately 2.2 trillion won. LX International, LX Semicon, LX Pantos, and LX Hausys are among the main affiliates of LX Group that can contribute to the acquisition through their cash holdings.

To secure additional funds, LX Group is expected to undergo a paid-in capital increase. In March, LX International approved a plan to double the number of shares issued, aiming to raise substantial capital. It is estimated that LX International could secure up to 2.7 trillion won through this change.

Harim, another potential buyer of HMM, plans to form a consortium with JKL Partners for the acquisition. Market experts believe that Harim has the potential to raise at least 2 trillion won in funding. The company has started raising funds through Pan Ocean, leveraging their operational expertise and financial power. Pan Ocean’s cash holdings, expected profits by the end of the year, and asset securitization through ship sales are all potential sources for raising funds. With a cash equivalent of 738.1 billion won and a positive cash flow, it is projected that raising 1 trillion won within the year would not pose significant difficulties for Pan Ocean.

Dongwon Group, on the other hand, plans to raise funds by underwriting shares of major related companies. The group’s stable governance structure and abundant cash assets are considered strengths that position them well to secure substantial funding. Dongwon Group’s reliable cash flow, coupled with significant real estate assets, gives them a competitive advantage in financing capabilities compared to other potential acquirers. It is speculated that Dongwon Group will separate from Korea Investment & Finance Group, with Korea Investment & Securities becoming a direct ally.

Overall, these companies are actively preparing to secure the necessary funds for the acquisition of HMM, utilizing their financial resources, and exploring various avenues for raising capital.

HMM Shanghai. Photo = Infostock Daily

[인포스탁데일리=김윤기 기자] LX, Harim, and Dongwon Group, which are vying to acquire HMM, are accelerating their efforts to secure astronomical acquisition funds.

There is market analysis that financing ability, one of the biggest factors in mergers and acquisitions, can act as an important pre-acquisition variable.

According to the industry on the 15th, the sale price of HMM is estimated to be at least 5 trillion won and up to 8 trillion won.

Since the market capitalization of HMM is estimated at 8 trillion won, it is known that at least 5 trillion won is needed for the acquisition.

Koo Bon-joon, Chairman of LX Group. Data = Group LX

LX Group, which is evaluated as the most advanced in its ability to send money, is focusing its efforts on securing ammunition for the acquisition of HMM.

LX Group’s cash holdings are approximately 2.2 trillion won. At the end of June, cash assets can be used as the main affiliates of LX Group: ▲LX International with KRW 1.2 trillion, ▲LX Semicon with KRW 200 billion, ▲LX Pantos with KRW 470 billion, and ▲LX Hausys with KRW 200 billion.

LX Group is expected to take a paid-in capital increase to secure additional funds.

Previously, at the regular general shareholders’ meeting held in March, LX International passed a plan to double the number of shares issued. Through this, the number of shares issued increased from the current 80 million shares to 160 million shares.

The market estimated that the additional capital that LX International can secure by changing the Articles of Incorporation has won up to 2.7 trillion.

Yangjae-dong site urban high-tech logistics complex. Photo = Harim Industry

Harim, a rival acquisition candidate, will form a consortium with JKL Partners to take over. The market believes that Harim will be able to raise at least 2 trillion won in funding.

According to a media outlet on the 14th, Harim Group started raising funds for the acquisition of HMM through Pan Ocean, which has fleet operation know-how and financial power.

The possibility of raising funds for the acquisition of HMM through Pan Ocean’s cash holdings, profits to be earned by the end of the year, and asset securitization through the sale of ships is under pressure.

At the end of June, Pan Ocean had a cash equivalent of KRW 738.1 billion and its cash flow from operating activities is estimated to be around KRW 300 billion. It is assessed that raising KRW 1 trillion within the year will not be a big problem.

Specifically, Pan Ocean operates a total of 301 ships. The analysis is that they can try to raise money by engaging in ‘sale and leaseback’, which involves selling and leasing old ships.

A panoramic view of the Dongwon Group headquarters in Yangjae-dong, Gangnam, Seoul. Photo = Dongwon Group

Dongwon Group plans to raise funds by underwriting shares of major related companies.

Dongwon Group’s strengths include a stable governance structure and abundant cash assets. The market believes that Dongwon Group can raise relatively large amounts of money if it starts liquidating shares of its affiliated companies.

An IB industry official said, “Dongwon Group has excellent cash flow based on solid performance,” and added, “It also has significant real estate assets, so it has the best ability to use money among companies that apply for acquisition.”

He also evaluated, “Dongwon Group and Korea Investment & Finance Group will be separated, and Korea Investment & Securities will step forward directly as an ally.”

Reporter Kim Yoon-ki rdr05@infostock.co.kr

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