This article was published on Aug. 6, 2025, at 4:11 p.m. on the ChosunBiz MoneyMove site.
Financial investors (FI) that have invested in mid-sized shipbuilding companies and equipment manufacturers have recently begun to exit. As the shipbuilding industry faces a boom, with performance and stock prices rebounding, they have determined that it is time to realize profits. There are also concerns that with investors simultaneously starting to sell, a 'peak out' may be imminent.
According to investment banking (IB) industry sources on the 6th, the Union Asset Management Company (UAMCO) and KHI Consortium recently selected Samil as the advisory firm for the sale of K Shipbuilding (formerly STX Shipbuilding) and began the formal sale process. The target for sale is the entire 99.58% stake held by these consortia. They plan to conduct due diligence by the end of this month, distribute an investment memorandum (IM) in September, and select a preferred negotiation partner by the end of the year. The hopeful price is reported to be about 500 billion won, applying a price-to-book ratio (PBR) of 1.2 to 1.5 times.
K Shipbuilding, which once rose to the fourth largest in the world based on backlog, experienced a liquidity crisis after the 2008 financial crisis. After more than 10 years of bondholder workouts and legal management, it was eventually sold to the UAMCO consortium for 250 billion won in 2021. Thanks to the boom in the shipbuilding industry, K Shipbuilding achieved an operating profit of 11.2 billion won last year, marking a return to profitability after eight years, allowing the consortium to begin recovering their investments after four years.
UAMCO is also pursuing the exit of STX Engine, a specialist in ship engines, after seven years. From March to October last year, UAMCO disposed of 5.8 million shares of STX in the over-the-counter market (block deal). This year, they sold another 1.5 million shares in the over-the-counter market on Jan. 22 and Feb. 17. This strategy aims to reduce the burden on potential buyers regarding high valuations and enhance the likelihood of a successful sale. Since the purchase price was approximately 10,000 won, UAMCO is estimated to have made about 70 billion won in capital gains.
EcoPrime Marine Pacific Limited, the largest shareholder of HJ Shipbuilding & Construction, another mid-sized shipbuilding company, has also begun to sell part of its equity in response to requests from financial investors (NH PE and Opus PE) after four and a half years. EcoPrime explained in a public announcement last March that it sold some of the investment funds from priority FI following the exercise of equity sale rights.
In addition, private equity fund (PEF) operator J&Private Equity has appointed NH Investment & Securities and Samil as underwriters for the sale of Hyundai HYMS, a ship block manufacturing company.
The background to the mass exit of FIs that invested in small to mid-sized shipbuilders around 2020 was the booming shipbuilding industry. Demand for high value-added vessels has increased, boosting profitability.
For the time being, the outlook does not seem bad. A prime example is the MASGA project, which aims to create a 200 trillion won cooperative fund between Korea and the United States. The market is also showing no signs of hiding its expectations, as evidenced by Daehan Shipbuilding's stock soaring nearly 90% at the time of its KOSPI listing on the 1st, achieving great success. It is currently trading at about twice the offering price (50,000 won).
However, there are concerns that a peak out may be imminent globally, as the volume of ship orders is decreasing. An industry official noted, "The fact that FIs that waited 3 to 5 years are rushing to exit can be interpreted as a signal that the super cycle is at its peak or has already passed," adding, "There is a perspective that many favorable circumstances have already been factored into the market, leading to overvaluation of corporate values."