News Highlights week: 01 - 2022

SM Line is said to have paid USD 14 M for a 0.49% share in HMM, which was described as an investment. In November, SM Line was forced to pull a planned IPO, which had previously fuelled rumours that the line was planning to use the proceeds to buy a significant stake in HMM.

Speculation over HMM’s privatisation has been further clouded after reported remarks by Minister of Oceans and Fisheries member Moon Seong-hyeok suggested the government could wait for the carrier to fully establish itself financially after the pandemic before selling up.

This contrasts with statements made in December that the government would sell its stake in 2022, with the intention of finding a buyer for at least a portion of its holding by March. HMM, in line with other carriers, is currently making record profits.

SM Line last year aimed to raise USD 510-710 M through an IPO, the first for a Korean shipping company since 2007. However weak demand prompted the line to halt the offering, saying it would try again when conditions improved.

Chinese carriers continue to benefit from subsidies

Chinese companies continue to receive government subsidies despite generating some of ther highest profits on record.

Newly listed Zhonggu Logistics, the Chinese domestic carrier which has plans to expand internationally, revealed it had received RMB 322M (USD 50.6M0 in grant in 2021 from a series of programmes including the so called Port and Shipping Cooperation Agreement and the “Shilk Road” Port and Shipping development fund.

By comparison, the compay reported net profits of RMB 1.55 bn (USD 243 M) for the first nine months of the year.

It received USD 230 M in government funding in 2018 which famously accounted for most of its profit that year. This figure dipped to around USD 130 M in 2019 but rose again to around USD 160M in 2020. The amount for 2021 will be confirmed in its full-year results.