KHI Investment and United Asset Management Company (UAMCO), the stalking horse consortium bidding for STX Offshore & Shipbuilding, is also considering acquiring Hanjin Heavy Industries & Construction’s special purpose ship business.
Korea Development Bank (KDB), which is selling mid-sized shipyard STX Offshore & Shipbuilding, plans to sign a contract with the consortium soon, after the sides signed a memorandum of understanding and entered into negotiations on specific terms.
The consortium would become the largest shareholder by investing 200 billion to 250 billion won ($180 million to $226 million) to buy the shipbuilder’s new shares. KDB’s shareholding, which is now 35.26%, would drop to a low-20% range.
After the acquisition, the consortium is likely to focus on consolidating STX Offshore & Shipbuilding’s business by winning more orders, and one option is an acquisition of Hanjin Heavy Industries’ special purpose ship division, industry sources said.
Hanjin Heavy Industries’ construction and shipbuilding businesses could be sold separately, but KDB wants to market them as a whole. Potential buyers, including a consortium of KDB Investment and Keistone Partners, are conducting due diligence on the shipbuilder, but they entered the race on condition that Hanjin Heavy Industries’ Youngdo shipyard be relocated and developed.
Industry watchers said STX Offshore & Shipbuilding’s acquisition of the special purpose ship division could be a win-win situation for potential buyers of both Hanjin Heavy Industries and STX Offshore & Shipbuilding. Hanjin Heavy Industries could continue operating its shipbuilding business, while the buyer of STX Offshore & Shipbuilding could win more orders by taking over the special purpose ship business.
However, it won’t be an easy task getting approval from the Busan city government, which has reportedly decided not to allow the shipyard to be moved out of the city in order to prevent massive job losses. (Reporting by Ik-hwan Choi)