Hyundai Merchant Marine to Attract New Investment from Abroad

Hyundai Merchant Marine, a major subsidiary of the Hyundai Group, is having talks with two foreign investors to attract an investment of approximately 200 billion won (US$187.8 million). If the negotiations turn out to be successful, the Hyundai Group can take a breather with greater liquidity and make a breakthrough in its ownership disputes that have lasted for a long time. 

At present, the equity capital of Hyundai Merchant Marine is 818.7 billion won (US$768.8 million). The company is planning to attract up to 200 billion won for 10 percent friendly shares. 

The stock price of Hyundai Merchant Marine is 13,250 won (US$12.44) as of now. However, the agreement is expected to be signed at a price lower than this for friendly shares. When the talks are wrapped up, the company will allow the investors to purchase the shares through a third-party capital increase. 

In this case, the ownership of Hyundai Group Chairperson Hyeon Jeong-eun, who is the largest shareholder of Hyundai Merchant Marine, can be more stable than before. She has about 27 percent shares in the group, like the other members of the late founder’s family including the daughters-in-law, which has resulted in conflicts surrounding business ownership. 

Chairperson Hyeon has made derivatives contracts via Hyundai Elevator, the holding company of the group, in order to get friendly shares. This means that the Hyundai Group has put up with huge losses so as to ensure friendly investors. However, the group is going to reduce the ratio of derivatives transactions once the new investment is made. It is expected to be a great boon for the corporate restructuring process of Hyundai Group as well as Hyundai Merchant Marine’s efforts to deal with its huge operating losses and debt ratio amounting to 1,000  percent.