SM Merchant Marine, also known as SM Line, has delayed its initial public offering (IPO) after weak demand from institutional investors.
Announced today, the decision came after consulting lead underwriter NH Investment & Securities, as investor sentiment remains muted due to Covid-19 and the weak growth of shipping stock prices.
The IPO postponement happened a day before retail investors were invited to subscribe to the stocks.
SM Line hoped to raise up to US$722 million through a listing on the Korea Exchange’s secondary KOSDAQ counter and held a two-day book-building session that ended on 2 November to assess the offer price. The stock was to be priced from KRW18,000 (US$15.30) to KRW25,000 (US$21.30) and SM Line planned to use the proceeds to expand its operations, including buying ships and containers.
SM Line rose from the ashes of bankrupt Hanjin Shipping, after the Samra Midas group acquired the failed company’s remaining portfolio.
“We have completed all the preparations for the IPO, and we passed the listing preliminary examination. However, rather than rushing to list, we decided to dispel market concerns and re-launch the IPO at an appropriate time when IPO demand recovers," said SM Line.
The South Korean carrier added, "Even though the company's profitability has improved, the stock offer price has not been well evaluated due to excessive concerns about the shipping market and a weak investor demand for IPO subscriptions.”