South Korea’s buyout firm Hahn & Company has recently completed its recapitalization of its portfolio company H-Line Shipping, the former dry bulk cargo arm of bankrupt carrier Hanjin Shipping.
The buyout firm has completed raising 750 billion won ($624 million) in syndicated loans, according to sources on July 13. The total amount of the acquisition financing is 820 billion won, including a 750 billion-won syndicated loan and a 70 billion-won revolving credit facility. The latest recapitalization has been jointly arranged by Hana Bank and NH Investment & Securities.
Hana Bank and NH Investment & Securities reportedly provided approximately 550 billion won of the total. The two firms resold the amount mostly to their affiliates. An additional 200 billion won of debts was also resold in the market.
The borrowers are operating company H-Line Shipping and holding company Hahn & Co Marine Infrastructure Holdings Limited, which owns a 100 percent stake in the shipping firm. The two companies had borrowings worth 580 billion won: the holding company had senior and mezzanine tranches worth 300 billion won and 100 billion won respectively, while the operating company had borrowings worth 180 billion won.
With the latest recapitalization, the amount of loans increased by 170 billion won. H-Line Shipping has borrowed 250 billion won and the holding company has borrowed 500 billion won with an interest rate in the upper 4% range.
Hahn & Co has proceeded with the latest deal in a bid to replace existing investors in its H-Line Shipping with new limited partners. Prior to the deal, the buyout firm and Hana Financial Group agreed to jointly acquire the entire stake in H-Line Shipping for approximately 1.75 trillion won, which includes equity contributions of about 1 trillion won and senior loans worth 750 billion won.
Hana Financial Investment underwrote 300 billion won of the total equity contribution of 1 trillion won and is reselling to domestic institutional investors. Hahn & Co is reportedly raising the remaining equity contribution of 700 billion won from global limited partners. (Reporting by Hye-ran Kim)