KKR recoups $206 mn in block sale of HD Hyundai Marine shares

Global private equity firm KKR & Co. Inc. has succeeded in cashing out of its stake in HD Hyundai Marine Solution Co. for 295 billion won ($206 million), more than what it intended during its first block-sale attempt in December thwarted by South Korea’s first martial law decree in over 40 years.

According to investment banking industry sources on Thursday, KKR offloaded 2 million shares, or 4.49%, of HD Hyundai Marine shares in a block trade led by JP Morgan and UBS after the market's close the day before.   

It sold the shares for 147,500 won apiece, a 9.3% discount to Wednesday’s closing price of 162,500 won.

It was the US investment giant’s second attempt to reduce its stake in the Korean ship repair unit of the country’s shipbuilding giant HD Hyundai Co. more than two months after its first sale try failed late last year.

It initially planned to unload 1,778,000 shares, or 4%, of HD Hyundai Marine on Dec. 3, 2024 but abandoned the plan due to mounting political uncertainties in the county following Korean President Yoon Suk Yeol’s sudden declaration of martial law, which lasted only a few hours, on the same day.

But the delay has turned out to be a blessing in disguise.

A BLESSING IN DISGUISE

Over the recent few months, the country’s shipbuilding and related stocks have rallied on growing expectations of a rise in potential deals from the US under the second Donald Trump administration, which has been actively seeking ways to revamp the world’s No. 1 economy’s naval fleet to countermeasure China’s dominancy in shipbuilding sector and maritime forces.

US President Trump has called for Korea’s cooperation, especially in vessel maintenance, repair and overhaul (MRO).

HD Hyundai Marine shares closed at 162,500 won on the day of KKR’s block trade, which was 22% higher than its closing of 132,800 won on Dec. 3 after Korea's short-lived martial law.

Compared to its initial public offering price of 83,400 won in April, the stock also soared 76%.

HD Hyundai Marine offered 8.90 million shares via listing on Korea’s main Kospi market to raise 742.6 billion won. It issued 4.45 million new shares while selling 4.45 million old shares, including KKR holdings.

Following its stake sales through the IPO and block trade, KKR has recouped 666.1 billion won in total, more than what it invested in HD Hyundai Marine.

In 2021, the US investment giant took over a 38% stake in the vessel maintenance and aftermarket service unit in a pre-IPO deal for 646 billion won, or 43,000 won apiece, becoming the unit's second-largest shareholder. 

Under a lock-up agreement, KKR had to keep the remaining 10.57 million shares, or a 24.4% stake, for six months after HD Hyundai Marine’s IPO in May last year, meaning it could sell off its shares any time after last November. 

Its current holdings in HD Hyundai Marine have fallen to 20%, while HD Hyundai remains the largest stakeholder with 55.8%.

After tanking more than 10% on Thursday due to KKR’s block trade the day before, HD Hyundai Marine shares closed down 1.7% at 143,100 won on Friday, extending its losing streak for two straight days.

Write to Jun-Ho Cha at chacha@hankyung.com

Sookyung Seo edited this article.