While Harim Group has been selected as a shortlist (qualified acquisition candidate) for the sale of HMM, Korea’s largest shipping company, there are concerns that HMM may be following in the footsteps of Pan Ocean, a bulk shipping company that was used to fund insolvent affiliates after being acquired by Harim . It comes out. Considering Harim Group’s governance structure and reputation, some in the financial world are pointing out that Korea Development Bank should closely look into the possibility that HMM, which has cash assets of 14 trillion won, could be used as Harim Group’s cash cow. According to the investment banking ( IB
) industry on the 6th , the side selling HMM , including Korea Development Bank and Korea Ocean Business Corporation , notified on the 4th that it had selected Harim · JKL Partners Consortium, Dongwon, and LX as eligible acquisition candidates. Harim and JKL Partners have become allies in the past when they jointly acquired Pan Ocean. Afterwards, the son of Harim Group Chairman Kim Hong- guk joined JKL Partners and the relationship developed even closer. At first glance, Harim can be classified as a success story, as it rose to the ranks of large corporations after acquiring Pan Ocean. However, if you look closely, there is a precedent for Pan Ocean being used by Harim. A representative example is Harim USA . Harim Group is Harim
Through USA , the company aggressively expanded its U.S. business, including acquiring Allen Family Foods, a large U.S. chicken specialty company, in 2011. However, Harim USA continued to incur massive losses and eventually became a headache for the group. At this time, Harim chose to invest in Pan Ocean, which has the best financial capacity. Harim USA conducted a paid-in capital increase worth 30.8 billion won to Pan Ocean in January 2021. Harim USA recorded a net loss of 32.8 billion won in 2021 alone and fell into a state of complete capital erosion with total capital of negative 3.5 billion won. At this time, Pan Ocean, which had no business connection, appeared as a savior.
At this time, the value of Pan Ocean’s 22.36% stake in Harim USA메이저사이트 plummeted to 19.3 billion won (share value) as of the end of the first half of this year. Comparing the current equity value to the investment, a valuation loss of approximately 11.5 billion won is being recorded. In May 2021, when it became known that Pan Ocean had invested funds in Harim USA , Pan Ocean’s stock price plummeted. At that time, Pan Ocean’s market capitalization evaporated by about 750 billion won in one month. Harim Holdings is also providing 10.8 million shares of Pan Ocean stock as collateral to guarantee payment to Harim USA . Collateral for $15 million in borrowings.
Harim Group is using Pan Ocean as a ‘money line’ by obtaining additional loans from the financial sector using Pan Ocean stocks as collateral. There are a total of 10 stock-secured loan contracts concluded by Harim Holdings using Pan Ocean stocks. The number of shares provided as collateral to financial institutions, etc. is 235,541,486 shares. This amount corresponds to 80.52% of all stocks held. Since Harim Holdings became the majority shareholder of Pan Ocean, the proportion of collateral has been continuously increasing. It’s like a treasure trove that you go to whenever you need money.
Harim Holdings, the holding company of Harim Group, took out a loan from Nonghyup and Woori Bank using Pan Ocean stocks as collateral at the end of June. He entrusted 22 million shares to Nonghyup and received a loan of 50 billion won. He borrowed money from Woori Bank by providing 12,738,854 shares of stock as collateral. In July of last year, it issued exchangeable bonds ( EB ) worth 112 billion won using Pan Ocean stocks as underlying assets and used them for new businesses such as real estate development.
Pan Ocean is not the only affiliate that has been reduced to a money source for Harim Group. In the past, hundreds of billions of won in funds from affiliate NS Home Shopping were also invested into subsidiaries engaged in new businesses such as Harim Industrial, Enbicon, and Glide. More than 650 billion won was invested in Harim Industries, which is developing the Yangjae Urban High-Tech Logistics Complex, and 26 billion won and 16 billion won were invested in food companies Enbycon and Glide, respectively. NS Home Shopping , which maintained high financial soundness by maintaining a zero-borrowing policy until 2015, has seen its performance and financial structure deteriorate since 2016 due to continued investments in Harim Industries and others.