Hyundai Merchant Marine decided to increase the limit on the total nominal value of its convertible bonds from 800 billion won (US$680 million) to 2 trillion won (US$1.7 billion).
Hyundai Merchant Marine held an extraordinary general meeting of shareholders on February 24 at its headquarters located in Seoul and decided to increase the number of shares to be issued from 600 million to one billion and the limit on the total nominal value of its convertible bonds from 800 billion won (US$680 million) to 2 trillion won (US$1.7 billion).
This decision is to benefit from recapitalization assistance from Korea Ships & Oceans, a corporation the South Korean government set up in order to assist in the growth of the shipping industry. Korea Ships & Oceans is scheduled to provide 720 billion won (US$612 million) for Hyundai Merchant Marine for the purpose by early next month.
Specifically, approximately 10 container carriers of Hyundai Merchant Marine are to be purchased at a market price of 130 billion won (US$110 million) and then the 720 billion won (US$612 million), which is equivalent to the difference between the market price and the book value, is to be supplied in the form of participation in paid-in capital increase and convertible bond acquisition. 150 billion won (US$127 million) is expected to be supplied based on participation in paid-in capital increase with the rest supplied via convertible bond acquisition.
After the recapitalization, Hyundai Merchant Marine can keep using the ships at low charter rates based on sales and leaseback, that is, repurchase of the ships from Korea Ships & Oceans.
The Original Posted by Jung Min-hee/Business Korea