South Korea’s prominent carrier, HMM, is poised to acquire a minority share in the renowned dry bulk shipowner, Polaris Shipping. This development comes as part of an agreement set to redefine the future of Polaris Shipping, according to exclusive reports from Korean media sources.
HMM is poised to take on the role of a strategic backer to the private equity fund, Woori Private Equity Asset Management (Woori PE), which has been designated as the preferred buyer to usher Polaris Shipping into a new era. This pivotal transition reflects the intentions of Polaris Shipping’s majority owners, Kim Wan Jung and Han Hee Seung, who are seeking an exit from the shipping industry.
Reports suggest that HMM will make a substantial investment of KRW 60 billion in this game-changing venture. Additionally, the state-owned Korea Ocean Business Corporation (KOBC) is stepping up with a formidable KRW 40 billion investment. Woori PE, with its comprehensive financial resources, will provide the remaining investment, ultimately valuing the transformative deal at an impressive KRW 600 billion (approximately USD 448 million).
Polaris Shipping, a well-respected name in the industry, boasts a fleet of 29 bulk carriers, including 18 Very Large Ore Carriers (VLOCS) and two LR2 tankers, underlining its standing as a prominent player in the maritime domain. Notably, the purchase of Polaris Shipping represents a defining moment for HMM, as it solidifies its presence and influence in the global shipping sector.
It’s essential to note that, during the selection process, COSCO Shipping Bulk also presented a competitive bid for the acquisition of Polaris Shipping. However, it was not favored as the preferred buyer. Concerns regarding foreign ownership of Korean shipping entities have played a pivotal role in shaping this decision.
In tandem with this groundbreaking transaction, HMM’s own sale process is advancing, following the unexpected withdrawal of a bid by Germany’s Hapag-Lloyd. The auction for HMM has garnered considerable attention from major Korean bidders, including Dongwon Industries, Harim Co, and LX Group. These domestic contenders are reported to be willing to make substantial financial commitments, with a minimum proposed bid of at least KRW 5 trillion for the shipping line.
As South Korea’s maritime landscape undergoes a significant transformation, the industry’s future looks set for fresh horizons, with HMM and Polaris Shipping at the forefront of this evolution. The integration of these two industry leaders is expected to reshape the dynamics of the shipping business, providing a remarkable new chapter in the annals of South Korea’s maritime legacy.
Sources: Alphaliner, HMM