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SM Line ups HMM stake to 5.52%, denies acquisition ambitions

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SEOUL : SM Group, comprising SM Line and its affiliates, has become HMM’s third largest shareholder after buying a substantial number of shares on 20 June.

In a filing to South Korea’s Financial Supervisory Service, SM Line said that the shares are held by itself and its related entities, namely Korea Shipping Corporation, SM Hi-Plus, Woobang Construction, STX Construction and Korea Line Corporation.

SM Group Chairman Woo Oh-hyun owns 1.29 million shares.

SM Group now owns 5.52% of HMM, just behind state policy lender Korea Development Bank and state-controlled ship finance institution Korea Ocean Business Corporation, which have stakes of 20.69% and 19.96%, respectively.

Talk in South Korean shipping circles is that SM Line could be eyeing a merger with HMM, or hoping to gain some advantage.

HMM declined to comment when contacted while a spokesperson for SM Line insisted that the shares purchase is only for investment.

HMM came under state control in 2016, after a debt-for-equity swap with KDB, whose chairman Lee Dong-gull has said it is time for the bank to release its grip on the South Korean flagship carrier.

In May, SM Line tried but failed to charter two of six 4,600 TEU ships that HMM had sold to KOBC on leaseback terms. Local media suggested that with a stake in HMM, SM Line could have access to HMM’s vessels.

However, South Korea’s new Minister of Oceans and Fisheries, Cho Seung-hwan, appointed after President Yoon Suk-yeol’s election victory in May, has said it is not yet time for HMM to become independent.

Cho noted that supply chain bottlenecks amid the Covid-19 pandemic have pushed up freight rates, but the situation could change when the situation normalises.

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