Three investment teams are confirmed to have tabled bids to acquire South Korea’s Hanjin Heavy Industries and Construction (HHIC), one of country’s most prominent naval shipbuilders.
HHIC’s main creditor and largest shareholder, the state-owned Korea Development Bank (KDB), said on 14 December that two of the three teams are led by local banks, with one by a shipping corporation. The names of the three partnerships are Dongbu Construction, Keithton Partners, and SM Merchant Marine.
Three South Korean investment teams have lined up bids to acquire naval shipbuilder HHIC, constructor of the Republic of Korea Navy’s PKX-B-class fast attack craft. (HHIC)
The KDB is expected to conclude the sale in early 2021 following approvals from authorities including the Defense Acquisition Program Administration (DAPA), which is responsible for defence-industrial policies.
The three investors are bidding to acquire all or part of KDB’s 83.45% stake in HHIC. The stake in its entirety will reportedly be worth up to KRW600 billion (USD550 million).
The KDB said in September that its HHIC shareholding is split across several financial institutions including the KDB itself. Institutions in the Philippines are also shareholders in the shipbuilder.
HHIC has been facing severe economic pressure for several years: a result of a downturn in sales in commercial shipbuilding and construction sectors.
As a result, the HHIC group has been looking to sell off assets including a shipbuilding subsidiary in the Philippines that the government in Manila has expressed interest in acquiring to support the Philippine Navy.
In fiscal year 2018 HHIC revenues increased year-on-year by 3% to KRW1.69 trillion. However, its losses expanded from KRW278 billion in 2017 to KRW1.32 trillion.
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