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Hyundai Samho lands W300b IMM Private Equity investment

Hyundai Samho Heavy Industries, a shipbuilding affiliate of Hyundai Heavy Industries, has landed a 300 billion won ($265.7 million) pre-initial public offering investment with IMM Private Equity.

Under the agreement with IMM PE, HSHI said it will issue 5.36 million new convertible preferred shares, with the private equity firm paying out 300 billion won in total to acquire the stocks at 56,000 won per share.

The new deal will bring Hyundai Samho’s total market value to 2.5 trillion won. 
Hyundai Heavy’s shipyard (Hyundai Heavy Industries)
Hyundai Heavy’s shipyard (Hyundai Heavy Industries)

“IMM PE’s investment puts more favorable valuation on HSHI than HSHI’s competitors, which says that IMM PE is confident that the market is likely to bounce back and the investment reflects the true valuation of HSHI’s competitive edge,” said an HSHI official in a press release Monday.

The investment comes amid turbulent times in the local shipping industry with the bankruptcy of Hanjin Shipping last August and Daewoo Shipbuilding & Marine Engineering’s mass debt-restructuring proposal seeking 2.9 trillion won in liquidity from its major creditors.

HSHI said the company plans to finalize the approval of the deal sometime this June and added it will use the investment to lower its debt-to-equity ratio to 78.1 percent from the current 96.4 percent.

Hyundai Heavy Industries also announced last month that Hyundai Samho had accepted an order by Russian shipping company Sovcomflot to build four tankers that run on liquefied natural gas, making the tanks the first large vessels in the world to run on LNG.

According to the company the deal is estimated to be worth roughly $240 million. The first ship is expected to be delivered to Russia near the end of next year.

By Julie Jackson (