Concerns have been raised in South Korea’s maritime industry about the proposed sale of the country’s top liquefied natural gas shipping company, Hyundai LNG Shipping, to a foreign entity.
Hyundai LNG Shipping was formerly the gas carrier division of South Korea’s largest carrier, HMM. Compatriot private equity firm IMM bought the LNG shipping unit from then-cash-strapped HMM, which is also being pushed for privatisation, in 2014.
Although it initially sought to find a domestic buyer, and reportedly failed to agree a buyback with HMM, IMM in March shortlisted five companies from the US, the UK, Greece and Denmark in its bid to sell its entire stake after more than 20 investors showed interest in taking over the gas shipping company.
According to South Korean press reports, the Federation of Korea Maritime Industries (FKMI), which includes 54 maritime organizations, issued a statement advocating for the prohibition of Hyundai LNG Shipping’s overseas sale, citing a potential threat to the nation’s energy security as well as the possibility of Korea’s know-how of shipping LNG being leaked.
Hyundai LNG Shipping has a fleet of 23 vessels, consisting of 16 LNG ships and six liquefied petroleum gas carriers and has worked on long-term contracts for the state-run Korea Gas Corp. (KOGAS). When IMM acquired the company, it only had six LNG ships.
The KFMI warned that the sale of Hyundai LNG Shipping could set a bad precedent and affect other companies, such as SK Shipping, which is also being explored for sale by private equity firm Hahn & Co. The Federation of Korean Seafarers’ Unions (FKSU) also expressed concern, with local media citing a statement saying that the potential ripple effects on Korea’s national economy and citizens’ lives would be enormous if Hyundai LNG Shipping fell into foreign hands and urging the government to prohibit the move in order to ensure national economic stability.
