After years of unsuccessful attempts to sell the shipping company HMM to a corporation, the South Korean government has now decided to nationalize the company.
Jeon Jae-so, Minister of Oceans and Fisheries, explained that the economy has changed since the Covid-19 pandemic. HMM, which has a fleet of almost 90 ships and a capacity of around 950,000 TEU, is the “flagship” of the Korean shipping industry and ranks 8th behind Evergreen in the global ranking of container shipping companies.
Minister Jeon suggested that the city governments of Busan, Ulsan and Yeosu could take over the state-controlled Korea Development Bank’s (KDB) 36% stake in HMM. The state-backed ship finance company Korea Ocean Business Corporation (KOBC) would retain its 35.7% stake in the company.
“The shipping industry is a national pillar and is often referred to as the fourth military branch of our country after the army, navy and air force,” Jeon explained. “Having a state-owned shipping company goes beyond economic considerations and is a matter of national security. Privatizing HMM, which has grown with taxpayers’ money and the dedication of its employees, is not the best choice.”
In mid-2016, the state took control of the debt-ridden HMM, then known as Hyundai Merchant Marine, through KDB after swapping its loans for shares in the company. This resulted in Hyundai Group losing control of the company, which was renamed HMM in 2020.
Poultry processor Harim Group, which is also the largest shareholder in dry-bulk shipping company Pan Ocean, was originally selected as the preferred bidder in December 2023 when the government tendered the HMM shares from KDB and KOBC.
However, the $5 billion bid fell through in February 2024 after no agreement could be reached with KDB and KOBC on management rights. A new owner for the shipping company was last sought in March of this year. In May, HMM announced its intention to buy back shares worth around $1.4 billion in order to become more attractive to potential buyers.
