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Shipping IPOs

SM Line eyes H2 IPO on Korean bourse, aims to expand US trade

By Jan 25, 2021 (Gmt+09:00)

SM Line eyes H2 IPO on Korean bourse, aims to expand US trade

South Korea’s SM Group, formerly known as Samla Midas Group, is pushing for an initial public offering of its merchant liner, SM Line Corp., on the local bourse by the end of 2021.

SM Line said in a statement on Jan. 25 that it has chosen NH Investment & Securities Co. as the underwriter of its IPO, with an aim to go public in the second half.

The plan comes after the shipper posted an estimated 2020 operating profit of 140 billion won ($127 million), a record for the company, boosted by growing demand for container ships amid soaring freight rates as global business activities began to recover from the pandemic lows.

SM Line expects its operating profit to rise further to about 200 billion won this year.

“The IPO will pave the way for us to expand our business as well as gain investor confidence through transparent management,” said Chief Executive Park Ki-hoon.

The company said proceeds from the public share sale will be used to buy more ships, invest in container equipment and explore new business opportunities.

SM Line was created in 2018 after SM Group, the mid-sized construction conglomerate, took over assets of bankrupt Hanjin Shipping Co., once one of Korea’s largest operators of container ships.

SM Line container ship docked at the Port of Long Beach
SM Line container ship docked at the Port of Long Beach

SM LINE EYES ADVANCE INTO US EAST COAST ROUTE

It has since grown its shipping operations on its Southeast Asian and American routes. In 2020, it joined hands with the world’s largest shipping alliance, 2M, to better serve its Korea-US West Coast route.

On Dec. 23, 2020, SM Line also participated in the launch of the K-Alliance, a group of five Korean shipping companies including HMM, Pan Ocean, Heung-A Line and Sinokor Merchant Marine.

The company said it plans to strengthen its Southeast Asian trade through the K-Alliance as well as expand its American business by launching a Korea-US East Coast route service.

Samla Midas Co. is SM Line’s largest shareholder with a 41.4% stake. Related companies TK Chemical Corp. and Samla Co. own 29.6% and 29.1% of the shipper, respectively.

SM Group’s other shipping affiliates include Kospi-listed Korea Line Corp. and non-listed Korea Shipping Corp.

Write to Ye-Jin Jun and Geun-Ho Im at ace@hankyung.com

In-Soo Nam edited this article.

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