HD Hyundai, which heads South Korea’s largest shipbuilding group, has sold all its shares in compatriot flagship carrier HMM, dispelling any notions that it could acquire the company, reports Container News.
About the deal
HD Hyundai said in a Korea Exchange filing on 22 August that its subsidiaries, HD Korea Shipbuilding & Offshore Engineering and HD Hyundai Samho sold a total of more than 4.87 million HMM shares for KRW94 billion (US$71 million).
The shares were initially acquired in 2006, when HMM, then known as Hyundai Merchant Marine and HD Hyundai’s shipyards were offshoots of the Hyundai chaebol. The shipyards then obtained a 26.7% stake in HMM, causing a dispute between HMM’s former chairwoman Hyun Jeong-eun and her brother-in-law, Chung Mong-Joon, who heads HD Hyundai.
The shipbuilding business explained that the stake purchase was to prevent outsiders from taking over HMM.
In 2016, after a debt-for-equity swap with state-controlled policy lender Korea Development Bank, HMM came under the state’s control. After the COVID-19-induced boom improved HMM’s financial health, the government embarked on an unsuccessful attempt to find a buyer for the company.
After an effort to sell HMM to Harim Group failed early this year, there was speculation that HD Hyundai could emerge as a buyer. However, the disposal of HD Hyundai’s interest in HMM has killed off that speculation. HD Hyundai stated in its filing that it sold its HMM shares to improve its financial health.
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Source: Container News
