In the ongoing saga of the sale of a majority stake in HMM (Hyundai Merchant Marine), negotiations have once again hit a deadlock. The consortium formed by Harim Group and JKL Partners, selected as the preferred bidder for the 57.9% stake held by Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC), failed to resolve its differences with the major shareholders.
As earlier reported by BBN, the Initially slated to finalize the sale details by January 23, discussions between the consortium and the major shareholders have been marked by disagreements, leading to a postponement. Despite another round of talks, no agreement has been reached, signaling the discussions will continue.
A representative from Harim stated, “We’re still talking to the selling side. We are sincere about acquiring HMM,” indicating the consortium’s commitment to the acquisition.
The sticking point in the negotiations appears to be the KRW1.68 trillion ($1.26 billion) convertible bonds held by KDB and KOBC. The consortium is seeking a three-year moratorium on bond conversion to maximize dividends from HMM. On the other hand, the major shareholders are pushing for a five-year restriction on the sale of purchased HMM shares, a demand not readily accepted by JKL.
Amidst the sale delay, the challenges looming over the shipping industry, including the Red Sea crisis and Hapag-Lloyd’s departure from THE Alliance, add complexity to HMM’s future decisions and competitiveness. The new owner of HMM will need to navigate these challenges effectively, particularly in vessel deployment and alliance restructuring.
However, concerns arise regarding Harim’s capability to take over HMM, with some comparing the situation to “a shrimp swallowing a whale” due to imbalances in cash holdings. Additionally, HMM’s employee unions are raising demands for increased benefits and retirement age, further complicating the situation.
The uncertainty surrounding the HMM sale highlights broader issues within the maritime industry, underscoring the need for strategic decision-making and stakeholder consensus to ensure the stability and growth of key players like HMM.
Source: loadstar
