Daehan Shipbuilding is pushing for a stock market listing amid a boom in the shipbuilding industry. After going through a workout and corporate rehabilitation process during the shipbuilding industry's restructuring in 2009, Daehan Shipbuilding is seeking an initial public offering (IPO) three years after being acquired by KHI in 2022.
According to the shipbuilding industry on the 11th, Daehan Shipbuilding filed for preliminary review for listing on the Korea Exchange on the 4th and is currently undergoing the review. KB Securities and NH Investment & Securities are acting as the lead managers. It plans to raise 80% of the 10 million shares through new shares and aims to go public within the year.
Daehan Shipbuilding entered a workout in 2009 and attempted to normalize management through the consignment management of Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean), but failed. After undergoing corporate rehabilitation procedures in 2014 and concluding them the following year, it was managed by the Korea Development Bank, its main creditor, before being acquired by KHI in 2022. This marks the company's push for a stock market entry 10 years after graduating from court management. Currently, KHI holds 65% equity in Daehan Shipbuilding, while Andah H Asset Management owns 31%.
Investment firm KHI entered the shipbuilding industry by consecutively acquiring Keangnam Enterprises (formerly STX Shipbuilding) and Daehan Shipbuilding in 2021 and 2022. However, after handing over control of Keangnam Enterprises to UAMCO, which specializes in non-performing loans, in December of last year, it is now focusing on Daehan Shipbuilding. Chairman Kim Kwang-ho of KHI serves as the co-representative of Daehan Shipbuilding.
Daehan Shipbuilding mainly builds medium and large oil tankers. Its core ship types include 150,000 deadweight tonnage (DWT) Suezmax crude oil carriers and 80,000-120,000 DWT Aframax crude oil carriers. Last year, it secured orders for eight oil carriers, resulting in a backlog of 24 ships (valued at $2.17 billion) as of the end of February this year. It can be converted to dual fuel (DF) propulsion ships powered by liquefied natural gas (LNG) and is producing environmentally friendly vessels equipped with scrubbers for sulfur oxide reduction, improving profitability.
Daehan Shipbuilding exceeded 1 trillion won in annual revenue last year. Its revenue was 1.0746 trillion won, a 32% increase from the previous year. During the same period, operating profit surged by 340% to 158.2 billion won. The debt ratio decreased from 525% in 2022 to 198% last year.
A representative of Daehan Shipbuilding said, "By delivering the quantities ordered at low prices early and reflecting the more profitable high value-added environmentally friendly ships in our revenue, we have achieved performance improvement."
Recently, the government decided to expand the scale of refund guarantees (RG) for smaller shipbuilders and the issuing agencies, leading to prospects for more order opportunities. The Ministry of Economy and Finance announced the 'Measures to Expand Shipbuilding RG Supply' on the 9th and decided to increase RG guarantees.
RG is a guarantee system in which financial institutions agree to pay the advance payments made by shipowners in case the shipbuilders fail to deliver the vessels. Meanwhile, smaller shipbuilders have complained that securing RG has been difficult compared to larger companies, which has significantly constrained their order activities.