Hahn & Company and Hana Financial Group will become joint owners of Hahn & Co’s portfolio company H-Line Shipping, the former dry bulk cargo arm of bankrupt carrier Hanjin Shipping.
South Korea’s private equity firm Hahn & Co is changing its investors, according to sources on May 22. The PE firm plans to distribute profits to existing limited partners and create a new fund to acquire a 100 percent stake in the shipping company which it owns through its PE fund.
To acquire the full stake, Hahn & Co has teamed up with Hana Financial Group. For a one trillion won ($808 million) project fund to be created for equity investment, Hana Financial Investment and Hana Bank submitted about 300 billion won worth of letters of commitment. Hana Financial Investment will participate as a general partner in the transaction.
The remaining 600 billion won will be financed through Hahn & Co’s blind-pool fund and the rest will be provided by a new project fund which is expected to be funded by domestic and foreign institutional investors.
Hana Bank and NH Investment & Securities will act as lead arrangers of a 750 billion-won acquisition financing, including a revolving credit facility. The borrowers will be operating company H-Line Shipping and holding company Hahn & Co Marine Infrastructure Holdings Limited, which owns a 100 percent stake in H-Line Shipping. The two companies have had borrowings worth 580 billion won: the holding company has had senior and mezzanine tranches worth 300 billion won and 100 billion won respectively, while the operating company has had borrowings worth 180 billion won.
With the latest recapitalization Hahn & Co has increased borrowings by 170 billion won to 750 billion won. The PE firm has borrowed 250 billion won under the name of H-Line Shipping and 500 billion won under the name of the holding company with an interest rate in the high four-percent range. The 200 billion won to 250 billion won sell-down process is likely to start in June.
Hahn & Co acquired H-Line Shipping in 2014 for 550 billion won from bankrupt carrier Hanjin Shipping. It took over Hyundai Merchant Marine’s dry bulk cargo operation in 2016. The PE firm owns the entirety of H-Line Shipping via Hahn & Co Marine Holdings. (Reporting by Hye-ran Kim and Byung-yoon Kim)