Woori, HMM, KOBC to buy bulk carrier operator Polaris

South Korean bulk carrier operator Polaris Shipping Co. is poised to sell its entire stake at around 600 billion won ($447.5 million) to Woori Private Equity Asset Management Co. and local financial investors, banking sources familiar with the matter said on Wednesday.

Polaris will tap Woori PE as a preferred bidder as early as Sept. 21 and complete the deal by the end of this year, according to sources.

Container line HMM Co. and state-run Korea Ocean Business Corporation (KOBC) will invest 60 billion won and 40 billion won, respectively, while Woori PE will inject the rest, said sources.

Polaris’ holding firm Polar Energy & Marine Co. holds an 80.5% stake, while a local consortium named Aeneas-NongHyup Private Equity owns 13.6% and Polaris co-CEOs Kim Wan-joong and Han Hee-seung hold the rest.

Managing around 50 vessels, Polaris transports bulk cargoes including iron ore, coal, grain and fertilizer from Brazil, Australia and South Africa to Asia. 

The bulk carrier operator has long-term contracts with some large clients, which makes it less volatile and more gash-generative. Among its clients are Vale S.A., one of the biggest logistics operators in Brazil, and Korea’s steel giant POSCO Holdings Inc., logistics firm Hyundai Glovis Co. and state-run Korea Electric Power Corp.

Polaris posted 1.4 trillion won in revenue and 222.5 billion won in operating profit last year, up 35.5% and 19.4% on-year, respectively. The company’s net profit reached 116.9 billion won last year.

HMM will be able to create synergy in shipping businesses by investing in Polaris, market watchers said. It is currently on sale with three main bidders Dongwon Industries Co., Harim Co. and LX Group, who are said to be willing to pay at least 5 trillion won to buy the No. 1 container line in Korea.  

Write to Jong-Kwan Park and Jun-Ho Cha at pjk@hankyung.com

Jihyun Kim edited this article.