Controversy has reignited over the potential sale of a Korean liquefied natural gas (LNG) shipping firm to foreign buyers after residents of Busan joined protests against private equity firm IMM’s plan to sell Hyundai LNG Shipping to Indonesia’s Sinar Mas.

Critics denounced the deal as a serious threat to President Lee Jae Myung’s maritime policy and urged the government to block the transaction.

“The deal could pave the way for foreign takeovers of private equity-owned firms like SK Shipping and H-LINE Shipping, destabilizing Korea’s energy transport infrastructure,” a Busan civic group said Tuesday.

SK Shipping and H-LINE Shipping, owned by another private equity firm, Hahn & Company, recently announced plans to relocate their headquarters to Busan following the Ministry of Oceans and Fisheries’ move to the city. The government says the relocation aims to develop Busan into a hub for the maritime industry in preparation for the era of Arctic shipping routes.

“If a foreign buyer replaces skilled, high-paid Korean crews with foreign workers to cut costs, Busan’s job market could collapse,” the group said. “Selling Hyundai LNG Shipping to a foreign company would also hinder the government’s goal of having Korean carriers handle at least 70 percent of the nation’s core energy imports.”

The group’s comments came after the Korea Shipowners’ Association and the Federation of Korea Maritime Industries issued similar statements opposing the sale. Both organizations warned that the deal could jeopardize Korea’s energy security, noting Hyundai LNG Shipping’s role in transporting gas for state-run Korea Gas Corp. (KOGAS).

IMM rejected those claims and signed a share purchase agreement on Nov. 27 with a Sinar Mas affiliate. Since IMM acquired Hyundai LNG Shipping 11 years ago, the sale has become an urgent matter for the fund. Private equity firms typically sell portfolio companies within about five years to return profits to investors.

“Hyundai LNG Shipping’s operations account for less than 6 percent of KOGAS’s total LNG imports,” IMM said. “The company will continue operating as a profit-oriented enterprise registered in Korea, fulfilling all obligations as a Korean shipping firm regardless of shareholder changes.”
According to the oceans ministry, the deal may require government approval depending on its structure.

“We are closely monitoring the process as many details remain unconfirmed,” said the head of the ministry’s shipping policy division. “We will assess whether the sale could disrupt LNG transport or harm the profitability of Korean carriers.”

IMM previously faced backlash in 2023 over an aborted attempt to sell Hyundai LNG Shipping to a European company after the two sides failed to agree on price and amid skepticism from the government.

Although Hyundai LNG Shipping’s former owner, HMM, was once considered a potential buyer, the container carrier struggled to offer a competitive price as it also searches for a new owner.
Source: The Korea Times