By Lee Hyo-sik (Korea Times)
Hyundai Merchant Marine (HMM) plans to issue rights to raise 693.6 billion won ($620 million) to add ships to its fleet and purchase stakes in shipping terminals in North America and elsewhere.
Korea’s largest shipping firm said Sunday it will offer 120 million new shares at 5,780 won each, stressing the money will be used to strengthen its core competitiveness.
HMM stocks closed at 8,040 won per share Friday, down 80 won, or 0.99 percent.
The company is the country’s sole globally competitive shipper after Hanjin Shipping, once the world’s seventh-largest shipper, went bankrupt in February under snowballing debts.
“As Korea’s only long-distance shipping firm, it is necessary to raise capital to purchase more large container ships and acquire stakes in shipping terminals around the world,” an HMM official said. “We will continue to work hard to enhance our core competence and cut costs to provide exporters and importers with optimal shipping solutions at affordable prices.”
Since the company was split from Hyundai Group and signed a creditor-led restructuring program in 2016, it has been implementing a range of cost-cutting measures. It also sold aging ships and non-essential properties to prop up its financial health.
With cross-border trade showing signs of a rebound, HMM has begun adding ships to expand routes, and is exploring opportunities to buy stakes in overseas shipping terminals.
In September, it placed a 182 billion won order with Hanjin Heavy Industries & Construction for two container ships with a cargo capacity of 11,000 twenty-foot equivalent units (TEUs).
The ships, which will be built at the shipbuilder’s Subic Shipyard in the Philippines, are scheduled to be delivered in the first half of 2018.
HMM plans to use the ships for South American trade.
The shipper also signed a $420 million agreement with Daewoo Shipbuilding & Marine Engineering for five very large crude carriers (VLCCs).
The 300,000-ton VLCCs, which are 336 meters long and 60 meters wide, are next-generation eco-friendly vessels equipped with high-efficiency engines and advanced fuel-saving systems.
The carriers will be built at DSME’s Okpo shipyard on Geoje Island in South Gyeongsang Province, and delivered to HMM by the end of 2019.