Dongwon Group, one of two groups vying to acquire South Korean flagship container line HMM, is reportedly planning to sell its office building in Seoul to raise funds for its bid.
South Korea’s largest fishing group is understood to have offered KRW6.4 trillion (US$4.97 billion) to buy HMM. The other bidder, South Korean poultry processor and Pan Ocean parent Harim Group is known to have offered a similar price.
Dongwon, which had cash holdings of KRW500 billion (US$380 million) as of 30 June, is believed to be embarking on aggressive fund-raising exercises.
The company’s financing plan comprises KRW1 trillion (US$762 million) of internal reserves, KRW3 trillion (US$2.2 billion) in acquisition financing and KRW2.5 trillion (US$1.9 billion) from secured loans.
The office building, belonging to Dongwon F&B, has a total floor area of 36,208 square metres, with five underground floors and 26 above-ground floors.
Dongwon Group acquired it for KRW107.3 billion (around US$100 million at the time) in 2017, paying for it all in cash. From the group’s perspective, there are no obstacles to liquidating the building. Since there are no loans to repay, the entire proceeds from the sale can be used.
Real estate experts were quoted in local media reports as providing an estimated selling price of up to KRW300 billion (US$230 million). There is a possibility that the price will rise slightly further as it is an item of high interest to real estate asset managers.
Martina Li
Asia Correspondent
