Korean shipbuilders, shippers push IPOs while wind is favorable in the sea market
Unlisted shipbuilders and shippers in South Korea are rushing to go public in the third quarter to ride on the favorable wind in the global sea with animated commerce and recovered commodity prices feeding their bottom line.
Hyundai Heavy Industries Co. (HHI) under Korea Shipbuilding & Offshore Engineering (KSOE) is readying for an IPO in August or September. It completed forming its syndicate in February with Korea Investment and Securities and Mirae Asset Securities leading the team.
The company applied for a preliminary IPO review earlier this month, suggesting that it can go public by September as it takes about two to three months to get approval and a month readying for a book building session.
According to its IPO prospectus, HHI will issue new shares tantamount to 20 percent of outstanding shares to raise 1 trillion won ($891.98 million) without yielding any shares owned by its parent KSOE. Upon listing, the shipyard is forecast to value 5 trillion to 6 trillion won. The proceeds will go to adding eco-friendly vessels and manufacturing facilities.
SM Line Corp., a mid-sized container shipping unit under Samra Midas (SM) Group in Korea, is eying debut on the secondary Kosdaq market.
SM Line is yet to file for a preliminary review, but aims to go public before Chuseok holiday in September. It has been busy expanding sea routes and fleet to add appeal to investors.
Bulk carrier company H-Line Shipping Co. will reattempt IPO after its first go in 2018 fell through due to sluggish shipping industry.
H-Line Shipping, which is based on dry bulk cargo arm of now-defunct carrier Hanjin Shipping, is currently owned by local private equity fund Hahn and Company Co.
There has not been any shipper entry since KSS Line Ltd. went public in 2007.
Korean shipyards and shippers are enjoying their best year in a decade thanks to the faster-than-expected recovery in global commerce that caused a shortage of sea carriers and spike in sea freight rates. Korean shipbuilders have netted up orders worth 14 trillion won in the first quarter, sweeping 52 percent of the total global orders. Industry experts project multi-year super cycle in the maritime transportation market after a lengthy downturn.