HMM shares will be put up for sale
Korea Development Bank (KDB) said this week that the country’s state-run lender is set to sell its stake in HMM, the world’s eighth-largest container carrier.
KDB Chairman Lee Dong-gull told an online press conference that the bank would cut down on its 25-percent stake in HMM, which has racked up huge profits amid the virus pandemic.
“We think that we need to dispose of HMM shares step by step,” Lee said. “It’s time to gradually decrease our stake in HMM.”
In addition to KDB, other South government agencies hold more than 10 percent stake in HMM, formerly known as Hyundai Merchant Marine, as a subsidiary of Hyundai Group.
HMM turned a profit in 2020 for the first time in 10 years as the shipper benefited greatly from the overflowing freight market after the outbreak of the novel coronavirus.
In particular, the Seoul-based company logged an operating profit of 2.4 trillion won ($2.1 billion) during the first six months of 2021, the highest half-year profit in its history.
KDB became the biggest shareholder of HMM in late 2016 when the latter was struggling to stay afloat. Since then, KDB has tried to unload the container carrier, but its attempts fell apart.
Early this year, there were news reports that the world’s fifth-biggest steelmaker POSCO would gobble up HMM. But the deal did not take place.
“The KDB has to sell off its stake in HMM. And we need to check what KDB chief Lee meant by saying that the state-run bank will diminish the stake in HMM,” Korea Investment & Securities analyst Choi Go-un said.
“He might want block deals, although it’s not sure for now. There are just a few potential buyers like POSCO or Hyundai Globis.”