Harim Group "Regret over HMM Acquisition Failure... No Collateral for Management Rights"

"It is difficult to accept transactions that do not guarantee practical management rights"

Harim Group explained that the final negotiations for the sale of HMM fell through because of "the transaction demand condition that only grants the status of the largest shareholder without securing actual management rights."

On the 7th, Harim Group issued a statement regarding the final collapse of the stock sale transaction negotiations for acquiring management rights of HMM, stating, "We presented constructive opinions and engaged sincerely in negotiations to secure stable management conditions for HMM and enhance its global competitiveness, but we deeply regret and feel very sorry that the transaction negotiations ultimately failed."

Pan Ocean, Korea's second-largest shipping company affiliated with Harim Group, and the financial investor (FI) consortium JKL Partners, selected as the preferred negotiation partner for the transfer of HMM's management rights, had been negotiating with the sellers (Korea Development Bank and Korea Ocean Business Corporation) for seven weeks but officially received notification of the negotiation breakdown from the sellers on this day.

Harim Group had previously established a plan to raise approximately 8 trillion won in acquisition funds through its own capital, acquisition financing, and FIs. In December last year, it stated that HMM's retained earnings (cash assets) would be prioritized for internal use within HMM to respond to the shipping downturn and strengthen future competitiveness.

A Harim Group official commented on the negotiation breakdown, saying, "There were differences in positions among the sellers, composed of banks and public enterprises, making negotiations difficult," and added, "Any private company would find it hard to accept a deal that does not guarantee actual management rights but only grants the status of the largest shareholder."

Harim Group had demanded that the shareholders' agreement, which includes provisions such as restrictions on HMM's cash dividends, prohibition of share sales for a certain period, and government nomination rights for outside directors, be limited to a validity period of five years. However, the sellers took the position that they could not accept this.

Harim Group further stated, "Despite the collapse of the HMM acquisition negotiations this time, we will continue to make greater efforts to enhance the competitiveness of Korea's shipping logistics through Pan Ocean, a bulk specialist shipping company."

They also added, "Although unfair criticism and false claims against Harim Group, the preferred negotiation partner, were raised by some media and labor unions, the reason we could not respond or clarify each one was due to our sincere efforts to comply with the confidentiality agreement."

Previously, the negotiation deadline was initially set for the 23rd of last month but was extended once to the 6th of this month. The negotiations, which had faced difficulties, reportedly gained momentum as Harim Group withdrew a significant portion of its demands, but the deal ultimately fell through due to unresolved differences over detailed matters.

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