HMM’s Restructuring
Hyundai Merchant Marine (HMM) announced on April 30 that the company and the IMM Consortium signed a contract to sell its LNG business unit, and the deal was approved by the board of directors.
The proceeds from the sale of the company are estimated at 1 trillion won (US$970 million), which includes debt. A special purpose company (SPC) for investment to be set up by HMM and the IMM consortium is going to establish Hyundai LNG Shipping. The SPC holds a 80 percent stake in the new entity, and HMM 20 percent.
Once the cash-strapped company receives the proceeds by the end of June, HMM will sell its eight LNG vessels and its stake in two LNG carriers and manpower to the new company.
Through this deal, HMM will be able to eliminate 500 billion won (US$485 million) in debt and gain 500 billion won in cash. Considering HMM’s stake in the new joint venture, the net inflow of cash is expected to reach 400 billion won (US$388 million).