The largest shipping company in Korea, HMM, is pushing for a public buyback worth 2.1432 trillion won. The shares will be purchased as treasury stock and subsequently burned. Earlier this January, HMM allocated 2.5 trillion won for shareholder return.
According to a financial supervisory service electronic disclosure on the 14th, HMM has decided to buy back 81,801,526 common shares at 2.1432 trillion won through a public buyback, and to burn all of them. The buyback and burning target corresponds to about 8% of the total issued shares.
Initially, HMM plans to conduct the public buyback at 26,200 won per common share. If the number of shares submitted for the buyback falls short of the intended acquisition quantity, all shares will be purchased. If the number exceeds the intended acquisition quantity, the purchase will be proportionally adjusted based on the intended quantity.
The buyback subscription period is from the 18th of this month to the 12th of next month. KB Securities is in charge of the buyback brokerage. After purchasing all the shares, they are expected to be burned on September 24.
It has not yet been determined whether the major shareholders, the Korea Development Bank (36.02% equity) and the Korea Marine Industry Promotion Corporation (35.67% equity), will participate in the buyback.
Choi Ji-woon, a researcher at Yuanta Securities Korea, said, "Depending on the participation of the Korea Development Bank and the Korea Marine Industry Promotion Corporation, stock price volatility may increase. This is expected to support HMM's stock price floor during a weak container market period."
HMM reported revenues of 2.6227 trillion won and an operating profit of 233.2 billion won for the second quarter of this year. Revenue increased by 1.5% compared to the same period last year, while operating profit decreased by 63.8%.