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Business deals

South Korean shipbuilder Hanjin Heavy put up for sale

Creditors agree to sell part of their 83% stake in troubled company

South Korean and Philippine creditors have agreed to sell part of their stakes in Hanjin Heavy Industries. (Photo courtesy of HHIC Philippines) 

SEOUL -- Hanjin Heavy Industries & Construction has been put up for sale after the troubled shipbuilder's creditors in South Korea and the Philippines agreed to sell part of their combined 83.45% stake by the end of this year.

The company said Tuesday evening that its creditors decided to sell part of their 69.5 million shares through a merger and acquisition process. HHIC said that the exact number of shares will be announced later.

The announcement comes one year after creditors took the helm of the company by converting their 687.4 billion won ($556.7 million) worth of loans to shares. Hanjin was in capital erosion due to financial losses in its shipyard in Subic Bay, the Philippines.

"We aim to close the deal by the end of this year," said Lee Dong-hyun, a spokesman for the Korea Development Bank, which leads the creditors. "It is too early to predict who will buy the company as we just decided to kick off the process."

State-run KDB has the largest stake with 16.14% in the company, followed by Woori Bank with 10.84% and NH Bank with 10.14%. Philippines' Rizal Commercial Banking Corp. owns 8.53%, while Land Bank of the Philippines has a 5.01% stake.

Shares of HHIC soared 15% in Wednesday morning trading, while the benchmark Kospi fell by 1.16%.

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