On 29, the investment banking industry said Sinar Mas recently reintroduced conditions in negotiations to acquire Hyundai LNG Shipping, including employment succession and maintaining the company’s status as a Korean-flag carrier. The move was seen as an effort to address concerns raised earlier about potential damage to energy security.
An IMM Private Equity consortium began the sale process in November last year, seeking to transfer Hyundai LNG Shipping to Sinar Mas for about 3.8 trillion won.
Hyundai LNG Shipping traces its roots to the liquefied natural gas carrier business unit of Hyundai Merchant Marine. It is South Korea’s largest liquefied gas shipping specialist, operating 12 LNG carriers and six liquefied petroleum gas carriers. Through long-term transport contracts with Korea Gas Corp., it carries about 25% to 30% of the gas imported into South Korea.
The shipping industry voiced immediate opposition after reports of an overseas sale. Industry officials have warned that a foreign sale of Hyundai LNG Shipping, which is closely tied to stable energy supply, could lead to the outflow of strategic transport assets and specialized personnel, the loss of LNG shipping know-how and other national wealth, and difficulties requisitioning ships in a national emergency.
Against that backdrop, Sinar Mas has again emphasized its intent to ensure operational stability after an acquisition and to keep the existing business structure, highlighting guarantees on employment succession and maintaining Korean-flag status.
Major hurdles remain. With tensions continuing in the Middle East, the need for energy-related strategic merchant shipping has again come into focus.
A key variable is whether the Ministry of Trade, Industry and Energy approves the sale. The ministry is reviewing, through its Foreign Investment Review Committee, whether the transaction involves a company deemed to hold national core technology. If it is classified as such, a separate approval process by the industry minister would be required, potentially delaying the deal significantly.
In 2023, European shipping companies also showed interest in Hyundai LNG Shipping, but the government blocked the sale on energy security grounds and it fell through.
“Now is a time when stable energy supply and demand matters more,” a shipping industry official said. “Given the role of a Korean LNG carrier, it is preferable to find a buyer at home rather than sell overseas.”
* This article has been translated by AI.
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