Private Equity Boost for Hyundai Samho

South Korea’s Hyundai Samho Heavy Industries (HSHI), a shipbuilding affiliate of Hyundai Heavy Industries (HHI), said it has attracted 300 billion ($264 million) won investment via pre-IPO.

 

Under the agreement signed with Korean private equity firm IMM Private Equity, HSHI will issue 5.36 million new convertible preferred shares and IMM PE will pay 300 billion won ($264 million) in total to acquire the shares at 56,000 won per share.

 

The deal brings HSHI’s total market value at 2.5 trillion won ($2.2 billion).

 

HSHI said it plans to finalize the approval of the deal early June this year through the meeting of board of directors, and to use the investment to lower its debt-to-equity ratio to 78.1 percent from current 96.4 percent.

 

“IMM PE’s investment puts more favorable valuation on HSHI than HSHI’s competitors, which tells that IMM PE is confident that the market is likely to bounce back and the investment reflects the true valuation of HSHI’s competitive edge,” according to an official from HSHI.

 

In 2016 HSHI turned a profit with 3.8686 trillion won in sales and 171.5 billion won in operating profits with new orders of 15 ships valued at $1.1 billion in total.

 

In March this year, HSHI won a $240 million order from Russia’s state-owned shipping company Sovcomflot to build four of the world’s first LNG-fueled Ice-Class IA aframax tankers.