HMM Sale Negotiations Hit Snags... Possible Extension of Deadline

by Kim Bokyung

Published 06 Feb.2024 21:09(KST)

HMM headquarters located in Yeouido Park One Tower. Photo by Yongjun Cho jun21@

Negotiations for the main contract between the Korea Development Bank, the Korea Ocean Business Corporation, and Harim regarding the sale of HMM are continuing until the last minute of the deadline.

According to the Korea Development Bank and the investment banking (IB) industry on the 6th, the HMM selling side and Harim, the preferred bidder, were engaged in final negotiations until the afternoon but have not yet reached an agreement.

Both parties are expected to continue negotiations until around midnight. The original deadline for negotiations was the 23rd of last month but was extended once to the 6th of this month.

Earlier difficult negotiations gained momentum as Harim withdrew a significant portion of its previous demands, but it is reported that differences remain over detailed matters.

In particular, it is reported that no agreement was reached on the validity period of the shareholders' agreement.

Harim proposed limiting the validity period of the shareholders' agreement to five years and applying exceptions to the deadline for selling shares held by JKL Partners, a private equity fund participating as a consortium member, but the selling side is said to be unwilling to accept these proposals.

However, Harim initially requested a three-year deferral on converting the remaining perpetual bonds held by the selling side into shares, but withdrew this request due to opposition from the selling side.

An IB industry official explained, "Discussions on detailed conditions are taking longer. Since both sides have a strong will to conclude the deal, the negotiations will not collapse, but there is a possibility that the negotiation deadline will be extended again."