South Korea’s Woori Private Equity Asset Management (Woori PE) has been named as the preferred bidder for VLOC giant Polaris Shipping.
According to local news agencies, the privately owned Polaris will be sold for between KRW 400bn and KRW 500bn ($301m to $376m).
Woori PE, a subsidiary of Woori Financial Group, was reported to be one of the companies that participated in the bidding when Polaris was put up for sale as its owners sought to exit shipping.
Other companies said to have shown interest included Cosco Shipping, Japan’s Mitsui OSK Lines, American multinational investment company BlackRock and state-owned ship finance fund Korea Ocean Business Corp (KOBC).
Cosco appeared to be the best fit due to its financial power and size. The Chinese shipping giant was reported to have formed a large acquisition team and hired UBS to evaluate the bid for Polaris.
Shipping sources speculated that Woori PE has been picked as the preferred buyer over Cosco as 10% of Polaris’ business comes from transporting cargoes for domestic companies such as steel producer Posco and state-run power utility Kepco.
Local news reported that liner company HMM and KOBC will also participate in the acquisition of Polaris as co-investors.
HMM will be contributing KRW60bn and KOBC KRW40bn.
The parties are believed to be aiming to conclude the deal this year.
Seoul-based Polaris was founded in 2004 by HS Han and WJ Kim.
Its majority shareholder is private company Polar Energy & Marine (80.52%), while a consortium of NH Private Equity and Aeneas Private Equity has 13.62%. Joint chief executives HS Han and WJ Kim hold the remaining stakes.
Polaris was one of the first Korean shipping players to invest in VLOCs, which had been converted from ageing single-hull VLCCs in the early 2000s.
At its peak, it owned close to 20 such vessels.
Polaris Shipping was reported to have logged close to KRW 1.4trn in sales last year, an increase of 35.5% compared with 2021. Its operating profit was up 19.4% to KRW 222.5bn and net profit amounted to around KRW 117bn.
Last month, Seoul Metropolitan Police Agency’s Financial Crimes Investigation Unit was reported to have raided Polaris’ office, seizing financial reports and hard disks.
Yonhap News Agency said the raid was part of an investigation into joint chief executives Kim and Han over the transfer of KRW 50bn of Polaris Shipping’s funds to holding company Polar Energy & Marine.
The money was moved as loans and management rights, according to the reports.
Officials at Polaris were not available for comment by the time of publication.
