(TrendHub KR – Posts by ICARUS Journalist) As the deadline for concluding the shareholder negotiations for the sale of HMM looms just two days away, unresolved issues continue to plague the discussions between the parties involved. The negotiations involve KDB Industrial Bank and the Korea Ocean Business Corporation on the selling side and the Harim-JKL Partners consortium as the priority negotiating partner. Central points of contention include the specifics of the deal and doubts about funding capabilities.
Originally, the first negotiation deadline was set for the 23rd of last month, but without reaching an agreement, it was extended by two weeks. Among the most debated issues was the suspension of bond-to-stock conversion, a point that was seemingly resolved following Harim’s withdrawal of their demand. However, discussions around the terms of the shareholder agreement, which includes restrictions on HMM’s cash dividends and the government’s right to appoint external directors, remain unresolved.
Harim Group’s plan to fund the acquisition, totaling 6.4 trillion won, through various means including a rights issue of Pan Ocean, acquisition financing exceeding 2 trillion won, asset securitization, and perpetual bond issuance with JKL Partners’ support, has also been met with skepticism. This uncertainty over the financing plan has contributed to the prolonged negotiation process.
Dual Insight Analysis
Optimistic Investment Perspective: The sale negotiations for HMM represent a pivotal moment for the future of South Korea’s shipping industry. Should the Harim-JKL Partners consortium succeed in acquiring the company, it could explore new business opportunities beyond shipping, leveraging HMM’s significant cash reserves. This could contribute to the company’s long-term growth strategy and diversification. Additionally, resolving the current disagreements could reassure investors about HMM’s future, potentially boosting its stock price.
Pessimistic Investment Perspective: The uncertainties surrounding HMM’s sale process could pose risks to investors. Questions regarding the consortium’s ability to finance the acquisition and disagreements over the terms of the shareholder agreement may impact the company’s operational direction and policies significantly. Such uncertainties could lead to increased volatility in HMM’s stock price in the short term and potentially affect the company’s strategic growth negatively in the long run.
Disclaimer
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