SEOUL, KOREA – As Korea Lines, the No. 2 bulk carrier after STX Pan Ocean, has been put on the sales block, those close to STX Pan Ocean fret that it would seriously affect their sales deal.
According to investment banking sources on December 24, several companies that have shown interest in STX Pan Ocean are turning toward Korea Lines before the deadline to accept letters of intent by the 26th.
An investment banker said, "The companies actively considering Korea Lines acquisition number around 4 or 5 while those wishing to buy up STX Pan Ocean are none so far."
Up until now, companies such as Hyundai Globis, Samsung SDS, GS Group, and CJ Korea Express have shown interest in taking over a controlling stake in STX Pan Ocean. But they have not said it officially.
The assets of Korea Lines are 1.5 trillion won, only about a fifth of those for STX Pan Ocean (7.4 trillion won). Its 983.3-billion-won debt is also only a quarter of that for STX Pan Ocean.
Naturally the asking price of STX Pan Ocean makes it harder for any acquirer to swallow. The market price for the 36.09-percent old shares would be 310 billion won. If premiums of taking over management control and the debt burdens are taken into consideration, the acquisition price would skyrocket.
The debt obligations that STX Pan Ocean must pay back in 2013 would be in excess of 1 trillion won. Its outstanding debt is 4 trillion won and it will come to 5.5 trillion won including derivatives debts.
*Article provided by The Korea Economic Daily
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