News / HMM: no sale if the right buyer can't be found, says KDB chief

Korea Development Bank (KDB) chairman Kang Seog-hoon said yesterday that HMM would not be sold if none of the shortlisted bidders proves “suitable”.

At a National Assembly session, Mr Kang said KDB and the other major HMM stakeholder, Korea Ocean Business Corp, were selling around 57.87% of their shares, doing due diligence and hoped to name a preferred buyer next month.

And he said: “If there isn’t a qualified buyer, we won’t sell the company. Of course there is no reason to sell.”

Harim Group (parent of carrier Pan Ocean) and JKL Partners, fishing and logistics conglomerate Dongwon and logistics and trading group LX International have been shortlisted. But there are concerns that all three face an uphill task in raising the necessary funds, as their assets fall short of a purchase price estimated at between KRW5 trillion ($3.5bn) and KRW10trn.

Last week, shipping experts at a panel discussion suggested that even if they could afford the shares, none has the subsequent finance to take HMM’s business to a new level.

But Mr Kang was quick to urge South Korean lawmakers not to be dismissive of HMM’s suitors, and said: “This is a principled statement, and it doesn’t mean the companies that have shown an intention to acquire HMM aren’t qualified. They’re very highly regarded in their respective sectors.”

He also touched on the progress of the Korean Air Lines-Asiana Airlines merger, saying Asiana’s directors should make a decision by 30 October on selling the indebted airline’s cargo business to satisfy the European Commission. KDB is also Asiana’s largest creditor.

The government has been pushing for the country’s two largest airlines to merge, after the Covid-19 pandemic hurt Asiana’s finances, but EC regulators are concerned a KAL-Asiana union will reduce competition on air freight routes between Europe and South Korea.

Mr Kang said: “I expect Asiana’s directors to make a rational decision. The possibility of recovering KRW3.6trn ($2.67bn) of public funds [if the merger fails] will be very low.”