Korea Asset Management News

South Korean shipping unit will purchase Hyundai Merchant Marine (HMM) vessels for USD 515 million and lease them back to the container carrier at favorable charter rates as part of a state aid program. Korea Shipping Co., a new entity servicing troubled shippers will act as a shipping bank to buy vessels from shippers to lease them back to help them out of financial troubles, was launched on Tuesday on initial paid-in capital of 1 trillion won. HMM will become the first beneficiary of the Korean government rescue schemes for shipping through the Korea Shipping Co. HMM also under state bank management is being groomed to take the place of Hanjin Shipping. “We are coordinating the funding plan upon specific support request from HMM.

South Korea's government and central bank will create an 11 trillion won ($9.50 billion) fund to support two state-run banks most exposed to the country's struggling shipping and shipbuilding firms. "Our key industries like shipping and shipbuilding are being aggressively caught up by countries like China and management conditions have worsened due to weak global trade," Finance Minister Yoo Il-ho said in a speech announcing the corporate restructuring plans on Wednesday. South…

Acquiring ships from financially troubled shipping companies will remain one of the mainstay jobs handled by South Korean finance house Korea Asset Management Corporation (KAMCO) next year, reports Korea Times. The company has bought 33.3 billion won worth of assets from two SMEs in the January-October period and plans to acquire assets valued at 40 billion won from two to three SMEs by December, a move to give relief to financially troubled companies, KAMCO Chairman Hong said in a press conference on Dec. After consulting with the Financial Services Commission (FSC), KAMCO has earmarked 100 billion won in its budget this year for acquisition of properties or other assets held by debt-laden SMEs in order to help them stay afloat, the state company said.

Anyone who was in Hamburg late last month the the SMM 2008 exhibition would contend that the shipbuilding market is stronger than ever, as the expo drew a record of nearly 2,000 exhibitors and 50,000 attendees. But the continuing global credit crisis, which apparently is now extended far beyond the subprime mortgage mess in the , could eventually what has been a historic shipbuilding run. The shipbuilders’ problems stem from those of both the shipping and banking, as a slowdown in trading is compounded by the inability or reluctance of banks to extend financing for orders. The Baltic Dry Index (BDI), the global benchmark for the cost of shipping commodities, has slumped to a quarter of its level four months ago.

POSCO and three other South Korean companies submitted their formal bids Tuesday for Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipyard, a state-run bank said. Korea Development Bank (KDB) and state-run Korea Asset Management Corp. (KAMCO) are seeking to sell a combined 50.4 percent stake in the shipyard, which they bailed out in 2000 after its parent Daewoo Group collapsed under a mountain of debt. KDB said it will pick a preferred bidder in October after allowing POSCO, Hyundai Heavy Industries Co., GS Group and Hanwha Group to conduct a due diligence on Daewoo Shipbuilding for three weeks starting next week.

Hyundai Heavy Industries Co. plans to bid for a $3.1b controlling stake in Daewoo Shipbuilding & Marine Engineering Co. reports said. A preliminary offer will be submitted Wednesday. The preferred bidder will be announced in September and the sale will be completed by the end of October, according to the policy lender. Hyundai Heavy will compete with Posco, GS Group and Hanwha Group for the 50.4 percent holding being sold by state-run Korea Development Bank and Korea Asset Management Corp. Source:  Bloomberg

Creditors of Daewoo Shipbuilding & Marine Engineering Co Ltd are formally seeking bidders for a 50.4 percent stake by next Wednesday, Reuters said. Korea Development Bank (KDB) and state-run Korea Asset Management Corp are the offering 96.4 million shares they hold in Daewoo Shipbuilding, according to an invitation notice carried in early Friday edition of the Korea Economic Daily. As expected, the notice specified that a bidder must meet the legal requirements to invest in the defence industry, a condition that effectively rules out foreign contenders. The deal is expected to fetch up to $8 billion, more than double its current market valuation, due to competition from local conglomerates seeking a new growth engine and strong earnings prospects for Daewoo.   Source:  Reuters

Daewoo Shipbuilding & Marine Engineering, one of 's "big three" takeover targets, has been put up for sale. The other two prime takeover targets are Hyundai Engineering & Construction and Hynix Semiconductor, Chosun reported. The Korea Development Bank said it has begun searching for a manager to sell Daewoo Shipbuilding with an aim to select a preferred bidder by August. After Daewoo Group was dismantled in 1999, the shipbuilding business was managed by creditors. The business graduated from its debt workout program in 2001 and has since been managed by the KDB and the Korea Asset Management Corp., which hold a combined stake 50.4 percent. KDB holds 31.3 percent and KAMCO 19.1 percent.

A South Korean state agency that is jointly selling 51 percent of Daewoo Shipbuilding & Marine Engineering said that it might reject bids from companies that did not support national interests, according to a Bloomberg report published in the International Herald Tribune. Korea Asset Management, which liquidates distressed assets at financial companies, plans to sell its stake in Daewoo Shipbuilding, which it owns with Korea Development Bank, next year. South Korea, the world's biggest shipbuilder, is facing increased competition from China and may lose its top ranking should Daewoo Shipbuilding be sold to foreign interests. Five years ago, Korean shipyards had 49 percent of all new orders by deadweight tonnage, according to Clarksons, a London-based shipping services company.