SEOUL — In a surprising turn of events, Hapag-Lloyd, the sole foreign contender in the bidding race for HMM (Hyundai Merchant Marine), South Korea’s esteemed flagship carrier, has been eliminated from further participation. State creditors Korea Development Bank (KDB) and Korea Ocean Business Co (KOBC) have jointly declared their decision to exclude Hapag-Lloyd from the privatization process, a move that has sparked discussions and debates within the maritime industry.
The announcement, made by multiple sources within South Korea, highlights the concerns of Korean authorities regarding the potential consequences of such a sale to foreign interests. The Federation of Korea Maritime Industries and the Busan Port Development Council, in a joint statement issued over the weekend, expressed their apprehensions. They argued that handing over HMM to Hapag-Lloyd could result in the loss of Korea’s invaluable national assets, including decades-worth of accumulated maritime logistics expertise, along with the management systems of container transportation and terminals.
In contrast to Hapag-Lloyd’s exclusion, a consortium led by Harim Group, the controlling entity behind Korean line Pan Ocean, has teamed up with a local private equity firm, gaining traction in the bid. Additionally, other contenders advancing to the second round of the bidding process include LX Holdings and Dongwon Group, both prominent Korean companies with vested interests in the logistics sector.
The next phase of the process involves comprehensive due diligence, an essential step in evaluating the potential buyers’ financial capabilities and strategic plans for the carrier. The selection of a preferred bidder is anticipated to be announced by early November. The state creditors are particularly motivated to expedite the sale, aiming to conclude the transaction by the year’s end.
HMM holds a preeminent position as South Korea’s largest shipping company. Its fleet boasts an impressive lineup, featuring 88 container ships, five bulk carriers, ten oil tankers, and four heavy-lift vessels. Moreover, the company has three Pure Car and Truck Carriers (PCTCs) under construction, reflecting its commitment to expanding its maritime capabilities.
As the bidding competition progresses, the maritime industry eagerly awaits the outcome that will significantly influence the landscape of South Korea’s shipping and logistics sectors. The decision to exclude Hapag-Lloyd from the race has ignited discussions about safeguarding national interests while seeking partnerships that ensure the continued growth and prosperity of Korea’s maritime domain.
Sources: KDL, Slpash 247
