Korea's Harim to divest of Hanjin KAL shares to fund HMM acquisition

The poultry processing firm's shipping affiliate Pan Ocean will sell off a 5.8% stake in Hanjin KAL at $120 million

Container ship of Pan Ocean, poultry processing firm Harim's shipping affiliate (Courtesy of Pan Ocean)
Container ship of Pan Ocean, poultry processing firm Harim's shipping affiliate (Courtesy of Pan Ocean)
Seok-Cheol Choi 1
2023-10-17 12:00:59 dolsoi@hankyung.com
Mergers & Acquisitions

South Korea’s poultry processing company Harim Group is set to sell off all its Hanjin KAL Co. shares its affiliate owns to secure capital for the acquisition of HMM, the country’s top container ship operator.

Harim’s shipping affiliate Pan Ocean Co. will divest of all its shares in Hanjin KAL, or a 5.8% stake, for 162.8 billion won ($120.3 million) to secure a return on its investment, according to its regulatory filing on Monday.  

Pan Ocean will execute the transaction within five business days from the date when the buyer completes the administrative process for the share acquisition. It will revise the disclosure when the transaction date is confirmed, the Kospi-listed shipping firm said.

From May to September 2022, Pan Ocean bought a 0.59% stake in Hanjin KAL, the holding firm of flag carrier Korean Air Lines Co., at 20.1 billion won. Then, the shipping firm purchased an additional 0.21% stake in Hanjin KAL at an undisclosed amount of capital.

In December 2021, Pan Ocean acquired an additional 5% stake in Hanjin KAL from Hoban Construction Co. at 125.9 billion won, raising the ownership to 5.8%.   

Harim aims to fund the acquisition of HMM by selling off Hanjin KAL shares via the shipping affiliate, market insiders say.

The bidders for HMM were shortlisted to a consortium led by Harim and local consulting firm JK Partners, logistics-to-trading conglomerate LX Group and canned tuna producer Dongwon Industries Co. in August. 

State-run Korea Development Bank (KDB) and Korea Ocean Business Co. (KOBC), the key shareholders of HMM, will pick the preferred bidder in November after two months of due diligence.

Harim can raise about 2.5 trillion won-3 trillion won of cash and cash equivalents on its own, while the major shareholders of HMM are asking for about 7 trillion won of the sale price, market insiders said.

Write to Seok-Cheol Choi at dolsoi@hankyung.com

Jihyun Kim edited this article.
#HMM acquisition deal #container line HMM #Harim Group Korea #Harim Pan Ocean #Pan Ocean Hanjin KAL #HMM Korea bidders #Hanjin KAL shares

Dongwon founder vows to acquire Korea’s top container line HMM

Dongwon founder vows to acquire Korea’s top container line HMM

Dongwon Group founder and honorary Chairman Kim Jae-chul receives an honorary doctorate in engineering from Hanyang University Dongwon Group, South Korea’s leading seafood and logistics conglomerate, has vowed to acquire HMM Co., the country’s top container ship operator, up for sal

Korea's HMM bidders shortlisted to LX Group, Harim, Dongwon

Korea's HMM bidders shortlisted to LX Group, Harim, Dongwon

HMM container ship (Courtesy of HMM) Bidders for HMM Co., South Korea’s top shipping company, have been shortlisted to LX Group, Harim Co. and Dongwon Industries Co., according to people with knowledge of the matter on Tuesday. German shipping giant Hapag-Lloyd AG didn’t pass the qu

LX Group may bid for container line HMM in four-way race

LX Group may bid for container line HMM in four-way race

The Korea Development Bank kicks off the HMM sale process South Korea’s logistics-to-trading conglomerate LX Group is expected to join the race for the country’s No. 1 shipping company HMM Co. in a deal worth an estimated 6 trillion won ($4.5 billion), according to people with knowl

HMM officially put on sale with CB conversion shares

HMM officially put on sale with CB conversion shares

HMM container ship  The privatization of South Korea’s No. 1 sea flag carrier HMM Co. has gained traction after an official announcement of its stake sale. But the deal could hit a snag due to the main creditor’s attempt to sell shares converted from perpetual convertible bonds
(* comment hide *}