Harim "HMM Retained Earnings to Be Prioritized for Strengthening Shipping Industry Competitiveness"

Official Position on Concerns Over Using Retained Earnings Through Dividends

Harim Group (Pan Ocean), selected as the preferred bidder for acquiring management rights of HMM, stated that the retained earnings (cash assets) held by HMM should be primarily used to strengthen the competitiveness of the shipping industry. This is Harim's official stance in response to some concerns that the retained earnings might be used for dividends.

On the 26th, Harim Group, the preferred bidder, stated in a press release, "HMM's retained earnings should be primarily used to prepare for the current recession and to enhance future competitiveness." They expressed their intention not to use the retained earnings for other purposes even if they acquire HMM.

Harim Group explained, "The global top one and two shipping companies, which far surpass HMM in fleet size and competitiveness, hold much larger amounts of cash to prepare for recessions," adding, "Especially in situations where a recession is anticipated, it is fundamentally desirable to minimize dividends."

Harim Group also stated that there will be no merger between Pan Ocean and HMM or artificial adjustments to the business structure. Harim emphasized that the management principle of 'independent management through market competition' will apply to both Pan Ocean and HMM, noting, "Companies that became affiliates through mergers and acquisitions after competing in the same industry such as feed and poultry have maintained their existing company names, brands, and products, and are even engaging in more intense competition."

Harim further explained, "There is absolutely no intention to receive additional dividends through the deferral of perpetual bond conversion," and that the proposed amendments (markups) will be sufficiently discussed during the negotiation process. From the preliminary bidding stage, they proposed opinions (markups) regarding the conversion of perpetual bonds for a certain period to resolve the overhang (potential excess stock) issue and protect stakeholders. Additionally, they stated, "Such markups are part of the usual procedures in M&A."

A Harim Group official said, "Unnecessary misunderstandings and speculation are being spread as facts, so within the scope of the confidentiality agreement, we are clarifying the facts and our position as the preferred bidder," adding, "We are fully aware of the harsh realities of the shipping industry, and if the procedures are properly completed, we will do our best to strengthen HMM’s competitiveness so that it can take pride as a national shipping company and to further develop Korea’s shipping industry."

This content was produced with the assistance of AI translation services.