This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:40 p.m. on Aug. 21, 2026.
As JOcean Heavy Industries, established by the largest shareholder of HJ Shipbuilding & Construction, decided to acquire the HD Hyundai Heavy Industries Gunsan Shipyard for 780 billion won, it is understood that about 300 billion won in additional acquisition funds must be raised by year-end for the transaction to close. Separate from the 100 billion won in acquisition financing previously raised by pledging HJ Shipbuilding & Construction equity as collateral, additional resources are needed. Because the seller, HD Hyundai Heavy Industries, has placed collateral rights on the Gunsan Shipyard site and other assets, making additional loans using them difficult, how the company secures funds going forward is seen as key to closing the transaction.
According to the investment banking (IB) industry on the 21st, JOcean Heavy Industries, a special purpose company (SPC) set up by EcoPrime Marine Pacific, the largest shareholder of HJ Shipbuilding & Construction, is pursuing financing ahead of the Dec. 31 closing of the Gunsan Shipyard acquisition transaction. The total acquisition price is 780 billion won. Under the transaction structure, half of the purchase price is to be paid by year-end and the remainder in 2030.
EcoPrime Marine Pacific, which holds 48.89% of HJ Shipbuilding & Construction equity, on July 1 pledged equity equivalent to 35% of total outstanding shares to a financial institution and took out a 100 billion won loan. It consists of a revolving credit facility (RCF) to cover the acquisition funds and interest costs.
In the industry, options available to JOcean Heavy Industries include additional capital injection by shareholder EcoPrime Marine Pacific or additional borrowing using the Gunsan Shipyard. However, EcoPrime is viewed as an investment vehicle to hold management control of HJ Shipbuilding & Construction, with a significant portion of its assets tied to its investment equity in HJ Shipbuilding & Construction. As 100 billion won has already been raised by using 35% of HJ Shipbuilding & Construction's total outstanding shares as collateral, the industry sees potential constraints on its capacity for further capital injection.
Senior collateral rights by the seller, HD Hyundai Heavy Industries, are also in place on the Gunsan Shipyard assets. Accordingly, if a new financial institution provides funds secured by the shipyard site or equipment, it may have to take a subordinated position. The industry believes that while additional loans can be extended since the assets already have senior collateral rights, the amount may fall short of needs or the conditions may become relatively unfavorable.
A reduction in the size of the stock-collateral loan from initial expectations adds to the burden. In early acquisition-financing talks, a plan reportedly considered was to raise about 200 billion won in loans and a 50 billion won RCF by pledging the same 35% equity stake in HJ Shipbuilding & Construction. However, the actual financing contracts were downsized to a total of around 100 billion won. With the amount that can be covered by a stock-collateral loan reduced, the funds that now must be raised additionally have grown.
Attracting a new financial investor (FI) is also mentioned as an option. However, given that JOcean Heavy Industries does not yet have its own cash flow and that additional investment is needed, safeguards such as a share-purchase commitment by existing shareholders may accompany such a deal.
Even if all acquisition funds are secured, additional funding needs remain. JOcean Heavy Industries plans to restart shipbuilding after completing the transfer of ownership at year-end and then refurbishing infrastructure and reinforcing equipment at the Gunsan Shipyard. Accordingly, separate resources are also expected to be needed for new capital expenditures (CapEx) and initial working capital.
However, the shipbuilding market and HJ Shipbuilding & Construction's recent earnings improvement are cited as positives in assessing the Gunsan Shipyard's business prospects. On a consolidation basis for the first half of this year, revenue was 1.2713 trillion won and operating profit was 89.4 billion won. Compared with the same period last year, revenue rose 38.5%, and operating profit jumped more than eightfold from 10.8 billion won.
HJ Shipbuilding & Construction also signed a Master Ship Repair Agreement (MSRA) to participate in the U.S. Navy's maintenance, repair and overhaul (MRO) projects. The agreement is valid through Jan. 22, 2031, and allows participation not only in auxiliary ships but also in key U.S. Navy MRO projects for combat ships and frigates. HJ Shipbuilding & Construction plans to use the Gunsan Shipyard to expand its shipbuilding business going forward.
An IB industry official said, "Regardless of the business feasibility of the Gunsan Shipyard acquisition, the immediate task is how to raise the roughly 300 billion won in acquisition funds remaining by year-end."