HMM joins bid to acquire Hyundai LNG Shipping

Hyundai LNG Shipping's LPG carrier HLG Amber

HMM, Korea's largest container shipper, has joined a bid to acquire Hyundai LNG Shipping and buy back the company it sold in 2014.

The decision is affected by the government's push to keep Korea's largest domestic liquefied natural gas shipping company under the control of a Korean company rather than a foreign corporation.

The board at HMM passed the bidding participation motion Thursday.

HMM said Friday it submitted a tender proposal to the financial advisor at 4 p.m. this day. The deadline for the final bidding was set for Friday.

The acquisition price proposed by HMM is reported to be about 300 billion won ($229.71 million), surpassing the offers made by four foreign companies — from the United States, Britain, Greece and Denmark — that have made it to the shortlist of potential buyers.

The sale process for Hyundai LNG Shipping began in March, and the final bidding was originally scheduled for late May. Yet it was postponed to allow for negotiations with HMM, as the offering prices from foreign bidders fell short of the expectations of IMM Private Equity and its affiliate IMM Investment, who are the major shareholders of Hyundai LNG Shipping.

Hyundai LNG Shipping currently stands as Korea's largest LNG tanker operator, operating a fleet of 16 LNG carriers and six LPG carriers.

The company was previously a part of HMM, formerly known as Hyundai Merchant Marine, which faced financial difficulties and subsequently sold its LNG shipping unit to IMM in 2014 for around 500 billion won.

HMM's decision to participate in the bidding of Hyundai LNG Shipping aligns with the government's concerns about the potential foreign control of the nation's top LNG shipping company. The government views the foreign ownership of a flagship carrier's LNG transportation as a risk in emergency situations.

Another factor favoring HMM's buyback is a clause that prevents HMM from entering the LNG carrier business until 2029. By acquiring Hyundai LNG Shipping, HMM would be able to regain access to the LNG segment.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]