SOUTH KOREAN INDUSTRY GROUPS SLAM HAPAG-LLOYD BID FOR HMM

The Federation of Korea Maritime Industries (FKMI) and the Busan Port Development Association (BPDA) have come out against German liner operator Hapag-Lloyd being allowed to bid to buy HMM.

Photo: HMM Container

They say that, “from the perspective of the national economy and security”, foreign control of South Korea’s flagship container carrier must be prevented.

The two organisations yesterday accused the government of being “unaware of shipping’s importance to the country”.

Korea Development Bank (KDB) and Korea Ocean Business Corp, which hold nearly 40% of HMM’s shares, invited bids for their stake on 20 July. KDB also plans to convert some of its HMM convertible bonds into additional shares, which could take the state stake to 57.87%.

Bids for HMM closed on Monday and a month of due diligence is expected before a preferred buyer is chosen. Then there would be negotiations before the sale contract is signed.

FKMI and BPDA said: “If we sell HMM to Hapag-Lloyd, we’re concerned about the outflow of invaluable national assets, such as our country’s container transport assets, terminals and know-how accumulated over decades. We’re angry that Hapag-Lloyd could even be included among the preliminary bidders.”

They added: “HMM deployed additional ships for our exporters, who had difficulties getting ships when overseas operators skipped calling at Busan due to logistical bottlenecks in 2021. HMM is an indispensable asset to our export-oriented economy.

“In the name of five million families who depend on the maritime industry, we urge that the sale of HMM to an overseas party be blocked to stabilise our country’s supply chain.”

Hapag-Lloyd, South Korean logistics group LX Pantos, bulk carrier operator Pan Ocean parent Harim Group, deepsea fishing and logistics business Dongwon Group have all submitted bids.

While observers doubt the government will allow a foreign company to control HMM, Hapag-Lloyd is widely seen as the financially strongest contender, with cash balances exceeding $7bn.

Samra Midas Group, parent of HMM compatriot carrier SM Line, and apparel exporter Global Sae-A, decided not to go ahead with their bids, reportedly concerned they could not meet the expected starting price, estimated at $3.8bn.

Writer: Martina Li