Skip to content
  • KOSPI 2267.15 -59.52 -2.56%
  • KOSDAQ 792.65 -21.28 -2.61%
  • KRX100 4826.33 -139.30 -2.81%
  • USD/KRW 1133.4 4.10 0.36%
  • JPY100/KRW 1,083.5 1.22 0.11%
  • EUR/KRW 1,323.07 -3.29 -0.25%
  • CNH/KRW 168.81 0.58 0.34%
Visit Market Data
Heavy Industries

Korea’s Hanjin Heavy up for sale, preliminary bidding by Oct. 26

Sep 28, 2020 (Gmt+09:00)

Creditors of Hanjin Heavy Industries & Construction Co. will put the cash-strapped South Korean shipbuilder up for sale next month as the lenders aim to recover as much as possible amid recent share price gains.

Hanjin Heavy said in a regulatory filing on Sept. 28 that its main creditor, the state-run Korea Development Bank, has invited interested parties to present their letters of intent (LOI) to join in preliminary bidding by October 26 for all or part of the 83.45% stake up for sale.

The stake is currently owned by KDB and seven other financial institutions from Korea and the Philippines, including Rizal Commercial Banking Corp.

The main creditor picked local accounting firm Samil PricewaterhouseCoopers and KDB’s own M&A consulting team as sale managers.

Industry watchers say the entire stake is estimated at between 400 billion and 500 billion won ($342 million and $427 million), but the price tag could rise, considering Hanjin Heavy’s market capitalization of more than 600 billion won, which has risen this year with its resumed shipbuilding orders.
Hanjin Heavy's Yeongdo shipyard in Busan
Among the most likely candidates for a controlling stake in the shipbuilder is KDB Investment, a restructuring subsidiary of the state-run KDB. Last month, KDB Investment hired local accounting firm EY Hanyoung Korea as its advisor for a potential bid for Hanjin Heavy.

Korea Real Estate Investment & Trust Co. (KOREIT) is also known be interested in the shipbuilder.

Analysts said strategic investors and private equity firms could submit their preliminary bids for Hanjin, which also builds special-purpose vehicles, including warships.

BUSAN SHIPYARD AMONG KEY ASSETS

One of Hanjin’s key assets includes its shipyard in Busan, the largest port city in Korea. A successful buyer could develop the area as a more lucrative commercial zone after moving the shipyard to another region, according to industry officials.

The mid-sized shipbuilder faced financial difficulties after its Subic shipyard in the Philippines posted massive losses in the past few years due to a sharp fall in new orders given a protracted slump in the global shipbuilding industry.

Write to Jun Ho Cha and Sang-eun Lucia Lee at chacha@hankyung.com

Edited by In-Soo Nam

Comment 0

0/300

0/5 articles left. Sign in for unlimited access to all articles.