Investment banks compete for HMM sale advisory roles

The Korea Times

The Korea Times

Finance

Sat, September 30, 2023 | 15:21

Markets

Investment banks compete for HMM sale advisory roles

Posted : 2023-03-22 16:12

Updated : 2023-03-23 08:20

An HMM container ship / Courtesy of HMM

KDB and KOBC to select advisory firms shortly

By Anna J. Park

Major investment banks, accounting firms and law firms are competing to win advisory roles for an upcoming sale deal of HMM, a global shipping logistics company of which the controlling stake is currently held by Korea Development Bank (KDB) and Korea Ocean Business Corporation (KOBC).

Aiming to sell the lucrative logistics company that the state-run companies acquired during a liquidity crisis in 2016, KDB and KOBC initiated the process early this month to select three advisory firms to handle financial, legal and accounting roles.

According to industry sources Wednesday, a few global investment banks, including JPMorgan, Merrill Lynch, UBS, Morgan Stanley and Citigroup Global Markets, as well as various local banks including Mirae Asset, KB Securities, Samsung Securities and NH Investment & Securities, participated in the bidding to be appointed as the financial advisory for the major deal. The deadline for submitting bidding proposals was Tuesday.

KDB requires its financial advisory firms to have a successful history in advising M&A deals over 300 billion won ($229 million) that were closed after Jan. 1, 2020. As such, global investment banks are expected to be more competitive in bidding.

But given the likelihood that state-run banks may choose a Korean business as the future buyer of HMM, considering the firm's huge presence in the national economy, local investment banks are also expected to be strong contenders for the advisory roles. The government has been hinting that it aims to sell HMM to a local company.

Regarding legal advisory, Bae, Kim and Lee (BKL), Yoon & Yang, Lee & Ko and Shin & Kim joined the bidding, while all big four accounting firms ― Samil PwC, Samjong KPMG, EY Korea and Deloitte Anjin ― also participated for accounting advisory.

An official from KDB said that the state-run lender, along with KOBC, has begun examining the firms' submissions.

"Once we thoroughly examine the proposals submitted during the bidding process, KDB and KOBC will jointly select three advisory firms, one for financial, one for legal and one for accounting advisory, in the near future," the official told The Korea Times, Wednesday. "The rough timeline for HMM's sale will also be examined and decided after advisory firms are selected."

KDB and KOBC hold 20.69 percent and 19.96 percent stakes in HMM, respectively. Their combined market value exceeds 4 trillion won. If the perpetual bonds held by the two state-run companies ― which can be converted to stocks later ― come out in the sale, the entire transactional amount for the acquisition deal is expected to reach 7 trillion won.

annajpark@koreatimes.co.kr