Shipping giant HMM has nominated former LX Pantos CEO Choi Won-hyok as its new head, drawing attention as to whether he will successfully lead the privatization of Korea’s largest logistics company, which has been under government control since 2016.
According to industry officials on Friday, HMM’s board of directors decided to put his appointment to the vote during the company’s upcoming general meeting of shareholders later this month.
Before leading the logistics unit of LX Group between 2015 and 2023, Choi served as a vice president of CJ Logistics, raising speculation that the two conglomerates may seek to acquire the shipping firm under his leadership.
Both LX and CJ were mentioned as candidates to acquire HMM in 2023 when the Korea Development Bank (KDB) and the Korea Ocean Business Corp. (KOBC) pursued privatization.
Along with Harim and Dongwon, LX was shortlisted as one of the three candidates qualified to conduct due diligence of HMM and participate in the main bid, although it dropped out of the competition later.
Harim, which was selected as the preferred bidder in late 2023, eventually failed to buy HMM in February last year, as the poultry processing company could not reach a price agreement with the shipping firm’s largest shareholders.
Since then, sales talks have been stalled.
Chairman Kang Seog-hoon of the KDB, which holds a 33.73 percent stake in HMM, said last year that it would take time to resume the privatization attempt, denying any plan to put the shipping company up for sale in the near future.
Oceans and Fisheries Minister Kang Do-hyung, who supervises the KOBC, which holds a 33.32 percent stake in HMM, also avoided mentioning details about the shipping firm’s privatization on Feb. 17 when asked about the sales talks.
Meanwhile, KOBC Ahn Byung-gil said on Feb. 18 that finding the most suitable buyer is the top priority.
Considering the recent shipping industry boom that led HMM to see a 501 percent year-on-year increase in annual operating profit to 3.5 trillion won ($2.4 billion) last year, it has become more difficult for the government to sell the company at an affordable price.
HMM’s ongoing negotiation with Hahn & Company to acquire SK Shipping’s divisions handling tankers, liquefied petroleum gas carriers and bulkers is seen as another unfavorable factor for its privatization, as the deal could make the company more expensive.
At this moment, both LX and CJ deny speculation that they will try to acquire HMM.
Hyundai Motor Group was also absent from a bid to take over the shipping firm under the leadership of incumbent HMM CEO Kim Kyung-bae, who led the automotive group’s logistics unit, Hyundai Glovis, between 2009 and 2018.
Source: KoreaTimes