- KHI Investment and UAMCO to sell 99.58% stake in K Shipbuilding
- Seller avoids foreign PE firms, sees shipbuilder as strategic national asset
- Company returns to profitability after 14 years of losses
- Estimated sale value: 500 billion won ($364 million)
- Daehan Shipbuilding IPO also set for July
K Shipbuilding Co., a mid-sized South Korean shipbuilder, is heading to the market this month after posting strong financial results. Valued at an estimated 500 billion won ($364 million), the sale could deliver significant returns to investors just four years after acquisition.
The 99.58% stake being offered is led by a consortium of KHI Investment and UAMCO. KHI holds 49.79%, and both firms are actively seeking a lead manager to oversee the sale, with requests for proposal already sent to accounting firms. KHI, known for its expertise in small- to mid-sized M&As, initially acquired a 95% stake in K Shipbuilding (formerly STX Offshore & Shipbuilding) in 2022 for 250 billion won.
Performance and Market Conditions
K Shipbuilding has turned around remarkably, posting an operating profit of 11.2 billion won in 2024 after 14 consecutive years of losses. The revival aligns with a broader supercycle in Korean shipbuilding as Chinese competition retreats amid US-China tensions. Its order backlog now spans two years, with utilization rates exceeding 110%.
In Q2 2025, the company’s operating profit surged 405% year-on-year to 12.7 billion won, while revenue rose 22.7% to 285.6 billion won. For the full year, revenue is projected to exceed 1 trillion won, marking a return to pre-2019 levels.
Despite an enterprise value estimated between 700 billion won and 1 trillion won, the stake sale is avoiding foreign private equity bidders. Sources say the shipbuilder is viewed as a strategic asset vital to South Korea’s economy, and selection will depend on both bid value and the buyer’s management capabilities.
Strategic Buyer Likely
One likely domestic bidder is KG Group, a South Korean conglomerate active in chemicals, steel, and logistics. Founded in 2003, KG has expanded via multiple acquisitions and is seen as a capable manager of strategic assets.
Meanwhile, UAMCO is aiming to recover 150 billion won in loans through this divestment, further raising the financial stakes of the transaction.
Daehan Shipbuilding IPO
In a related development, Daehan Shipbuilding—also owned by KHI Investment—is preparing for a public listing on the Korea Exchange this month. It seeks to raise up to 500 billion won, with a valuation potentially reaching 1.93 trillion won based on a 4.58x price-to-book ratio—similar to Korea’s top four shipyards.
KHI acquired Daehan in 2022 for 200 billion won in partnership with two other local private equity firms who have since exited. Daehan had previously been under a debt rescheduling program from 2009 to 2022.
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Source: KED Global
