All In
Hyundai Merchant Marine significantly increased the possibility of successful financial restructuring on Feb. 12 by announcing the disposal of its LNG transport business. Late last year, it had announced a large-scale corporate restructuring plan worth 3.3 trillion won (US$3.1 billion), which exceeded the expectations of market participants.
Announcements of aggressive asset disposal are expected to greatly contribute to its efforts for financial structure improvement. In particular, the company is expected to have enough room to move once it succeeds in selling its business valued at 1.1 trillion won (US$1.03 billion).
If Hyundai Merchant Marine moves ahead with the sale of the LNG transport business as scheduled, it can deal with almost 100 percent of its debt coming to maturity this year, which are divided into approximately 420 billion won (US$394 million) of corporate bonds, 400 billion won (US$375 million) of corporate bills, and 300 billion won (US$281 million) in shipping finance. In the meantime, IMM Investment has offered 1.1 trillion won (US$1.0 billion) for its LNG carrier business.
It is estimated that the company’s consolidated debt ratio at the end of Q3 last year will be dropped from over 1,000% to 600% or so in this case. “Most of our liquidity problems can be tackled when the new funds are added to the 600 billion won of cash we have as of the end of 2013,” the company explained, adding, “We will sell our site in Yongdang, Busan City, in the first half of this year to raise an extra 70 billion won, too.”
The amount of new capital procurement increases to about 1.4 trillion won (US$1.2 billion) when the 56.3 billion won (US$52.8 million) raised by selling 18,097 containers in December 2013, the 46.5 billion won (US$42.8 million) from the sale of 1.13 million KB Financial Group shares, and the 93 billion won (US$87 million) to be brought through stock disposal are added to it. Then, the company has to finance about two trillion won for 18 months until the deadline of the restructuring plan.