South Korean mainline operator SM Merchant Marine (SMM) is exploring a public listing on the Korea Exchange through an initial public offering in the second half of 2021.
[s2If is_user_logged_in()]The company’s parent, Samra Midas (SM) Group, announced on 25 January that SMM, which markets its services under the SM Line brand, had appointed NH Investment & Securities as its IPO underwriter. SMM was formed in 2016, when SM Group acquired the business of bankrupt Hanjin Shipping.
SMM’s IPO plans coincide with a period of record profits for the liner shipping industry. The company is expecting an operating profit of KRW140 billion (US$128.79 million), its best result since it commenced operations in 2017.
A fund-raising target for the IPO has not been set but SMM plans to use the proceeds to acquire ships and containers, in order to expand its service routes, primarily on the intra-Asia and Transpacific trades.
SMM is expecting the recovery in container shipping to continue this year and it has agreed to join the K-Alliance, a grouping of South Korean liner operators that will codeshare on services to Southeast Asia. In February 2020, the company began co-operating with the 2M alliance’s services between Asia and the west coast of North America.
SMM’s representative said, “Based on our co-operation with the 2M alliance, we have stabilised our Transpacific services and improved our profit structure significantly through our company-wide cost reduction efforts,” he added, “We set our operating profit target to more than 200 billion won this year.”
The SM group’s stakes in SMM are currently held through other subsidiaries, Samra Midas Company, TK Chemical and Samra Company owning 41%, 29.55% and 29.08%, respectively.
Martina Li
Asia Correspondent[/s2If]
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