SEOUL Feb 12 Hyundai Merchant Marine
plans to sell its liquefied natural gas (LNG)
transport business to a local investment firm for 1.1 trillion
won ($1.03 billion) as the South Korean shipper continues its
search for funds to pay off debt.
Hyundai Merchant Marine is on course to post its third
straight year of loss as demand has been weak since the onset of
the global economic slowdown. Selling the LNG transport unit is
part of parent Hyundai Group's plan to raise support funds of
more than 3.3 trillion won.
Hyundai Group, once affiliated with Hyundai Motor Group,
also plans to support South Korea's second-biggest shipper by
market share with the proceeds of selling brokerage Hyundai
Securities Co Ltd.
In a statement on Wednesday, Hyundai Merchant Marine said it
has chosen IMM Investment Corp as the preferred bidder for the
LNG transport business, and that it plans to complete the deal
in the first half of this year.
Shares of Hyundai Merchant Marine rose as much as 12 percent
after the announcement compared with a benchmark index
which inched up 0.4 percent.
The LNG unit, which has provided Hyundai Merchant Marine
with stable cash flow, owns 10 vessels and carries nearly 20
percent of South Korea's annual LNG imports under long-term
contracts with state-run Korea Gas Corp.
"The sale... is our best option to restore market
confidence, and we will concentrate our efforts to improve
competitiveness in containers and bulk carriers going forward,"
Hyundai Merchant Marine said in the statement.
An official at IMM Investment was not immediately available
Separately, Hyundai Merchant Marine's bigger rival, Hanjin
Shipping Co Ltd, plans to sell part of its bulk
carrier fleet and other assets to raise half of the 1.53
trillion won it needs to plug losses.
($1 = 1070.8500 Korean won)
(Reporting by Hyunjoo Jin and Joyce Lee; Editing by Christopher