Hyundai Group, Orix discuss logistics sale

Hyundai Group, which plans to raise 3.3 trillion won ($3.2 billion) from asset sales to ease a cash crunch, is in talks to sell a stake in its logistics unit to Orix in Japan.

The details, price and sale instrument are still under discussion, group spokesman Lee Jun-ki said. Hyundai Group, will sell part of its stake in Hyundai Logistics for 650 billion won to a special-purpose company that will be formed by Hyundai Merchant Marine and Orix, reported Seoul Economic Daily, citing unidentified industry officials.

The group is selling its entire stake in Hyundai Securities, properties and businesses as a slump in the global shipping industry has caused its main Hyundai Merchant Marine unit to struggle to repay maturing debt. The shipping line reported losses for the third straight year in 2013.

Orix advanced as much as 1.4 percent to 1,684 yen ($16.43) before changing hands at 1,669 yen as of the 11:30 a.m. trading break in Tokyo. Shares of Hyundai Merchant fell 0.3 percent to 9,070 won in Seoul.

Hyundai Group has raised 1.91 trillion won from selling assets, including its liquefied natural gas shipping operations. Orix expressed interest in buying Hyundai Securities and its two financial units, Yonhap News Agency reported May 30.

Hyundai Group could raise about 300 billion won from selling the Hyundai Logistics stake, and the group will have managerial rights to the unit after the sale, according to Seoul Economic Daily.

Hyundai Merchant Marine owned 47.7 percent of Hyundai Logistics at the end of March and Hyundai Global 24.4 percent, according to its financial statement. Group Chairwoman Hyun Jeong-eun has 12 percent of the logistics unit.

Hyundai Group was founded in 1947 by Chung Ju-yung. Hyundai Motor Group was spun off in 2000 amid efforts to reduce the power of the chaebol business groups. Hyundai Heavy Industries Group, which owns shipbuilders and a refiner, separated in 2002, while a department store unit left in 1999.

Orix in December agreed to sell its entire 71.9 percent stake in STX Energy, a Korean company that operates power plants and was sold to help raise funds for its cash-strapped parent STX Group, to GS Holdings and LG International for 630.7 billion won. Bloomberg