Seoul, October 30 — The South Korean government has increased its stake in the country’s largest shipping company, HMM, to 67.05%, following a bond conversion by state-owned shareholders Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC). The transaction, executed on October 22, involved the conversion of bonds worth KRW 660 billion (USD 477 million) into 132 million shares, each valued at KRW 5,000. These new shares will be listed on November 13.
This development has reignited discussions around the potential privatization of HMM, which saw strong financial results this year amidst an improved market. The bond conversion complicates potential sale proceedings, however, as the increased government stake raises the price of shares available for purchase. KDB and KOBC may be obligated to pursue this option to secure the highest return for their investment, with projections indicating the government’s stake could reach 74% by next year if additional bonds are converted.
Conflicting signals on HMM’s privatization have emerged from officials throughout the year. In March, the Minister of Oceans and Fisheries hinted at discussions to restart the sale, but in June, KDB Chief Kang Seog-hoon stated there were no immediate plans to proceed.
The timing, nevertheless, may be opportune, as HMM recorded its best quarterly performance in Q2 with a net profit of KRW 661 billion (USD 478 million). While previous bidders Harim Group and Dongwon may be interested in renewing bids, industry observers suggest the government could aim for larger corporations like Hyundai Motor, POSCO, or Hanwha.
Despite this renewed interest, potential buyers may be deterred by the possibility of government intervention in HMM’s future operations. The company’s privatization remains uncertain, as both market conditions and government strategy continue to evolve.
