Efforts are being made to sell off a controlling stake in South Korea’s Hyundai LNG Shipping before the end of this month with a push being made to ensure the lead shareholding goes to a domestic company.
Widespread reports in the Korean press have named HMM as the possible buyer of the embattled LNG shipowner, which is currently controlled by equity funds IMM PE and IMM Investment Consortium.
HMM, which is itself under the control of Korea Development Bank (KDB) after it suffered a financial meltdown in 2014, is said to have been pushed to the fore to prevent a buyout by an overseas contender and is reported to have made an offer on the Hyundai LNG Shipping.
Both JP Morgan and Goldman Sachs have been named to TradeWinds as among those who have been taking an active interest in the sale of Hyundai LNG Shipping.
But domestic industry sources in Korea told TradeWinds that a sale to an international outfit would only stand a chance of going through if Korean management were put in place at the LNG shipping company.
Those attempting to follow the sale report a high level of secrecy surrounding the process with senior management at Hyundai LNG Shipping being kept out of the discussions.
Government ministries and Korean seafarers have been vocal in their demands that Hyundai LNG Shipping should go to a Korean buyer.
In March, press reports emerged in Korea that up to 20 potential buyers, including five international names, had shown interest in Hyundai LNG Shipping.
At the time, the overseas names were identified only by their countries, with one each from the US, UK and Denmark along with two from Greece.
The sales process kicked off with a tender that is being overseen by Citigroup.
A price of between KRW 600bn ($467.29m) and KRW 700bn has quoted for the company.
Last week, HMM was reported to have offered KRW 500bn.
If HMM — which at some point is also likely to be sold off by KDB — does emerge as the preferred
candidate, it will effectively be buying back some of its original assets.
Hyundai LNG Shipping was formed from the sell-off of HMM’s gas carrier business when bankruptcy loomed for HMM in 2014.
At the time, IMM paid KRW 500bn for Hyundai LNG Shipping and its six-ship LNG carrier fleet,
which is fixed to domestic gas importer Kogas.
Hyundai LNG Shipping has since expanded and has been courting more international business inking newbuilding deals against term charters with Spain’s Repsol and Malaysian state energy giant Petronas.
The Korean shipowner now controls 23 vessels comprising 16 LNG carriers, six LPG ships and one bunker vessel, which are all fixed on term business.
But this year, questions arose about the company’s ability to finance the six LNG carrier newbuildings that are being built against charters with Petronas.
