JKL Partners sets its sights on HMM
While international investors for the carrier HMM have been excluded by the authorities, the domestic bidders need to demonstrate that they have funding available. The respective sums are a prerequisite for the entry as an investor.
After forming a consortium with Harim Group, JKL Partners, which is in the race for the acquisition of HMM worth KWR 5 trillion (USD 3.76 billion), is doing exactly that. JKL's approach is to secure funding through the sale of its affiliate Lotte Insurance.
According to South Korean media, the private equity fund JKL Partners, the largest shareholder of Lotte Insurance, has already launched the selection process for an underwriter for the sale of its 77% stake in the company. Since JKL Partners acquired this majority ownership by investing approximately KWR 730 billion in 2019, there is a good business deal in prospect.
The current estimated selling price for Lotte Insurance ranges from KWR 2.7 trillion to KWR 3 trillion. The markets have already reacted to the news, since Lotte Insurance's market capitalisation went up currently to around KWR 740 billion from approximately KWR 557 billion before the news broke.
Nevertheless, industry experts expect a selling price of around KWR 2 trillion, considering the company’s value as overrated by the market. Yet, funds for the purchase of HMM are required. The Korea Development Bank (KDB) recently estimated HMM’s expected selling price to be at least KWR 7 billion.
KDB always made it clear that it plans to secure the highest (domestic) bid offered. The selling side selected Harim Group, LX International, and Dongwon Industries as qualified bidders for HMM on 4 September 2023 and initiated the due diligence process. (cd)