Orix-led consortium to buy Hyundai logistics unit

According to a release, the group will pay KRW600 billion ($580 million) for an 88.8% stake via a special purpose vehicle (SPV) jointly established with Hyundai Merchant Marine (HMM), a shareholder of Hyundai Logistics.

Orix will jointly subscribe to convertible preferred shares of approximately KRW240 billion, which represents 70% of shares issued by the SPV. The SPV will issue the remaining 30% shares in the form of common shares to HMM and then raise additional funding through a non-recourse loan.

Hyundai Logistics was established in 1988 as the logistics arm of South Korean conglomerate Hyundai Group. It is now one of the three largest logistics enterprises in South Korea and is mainly involved in businesses delivery, third party logistics, and freight forwarding.

Around one third of Hyundai Logistics' revenue comes from its parcel delivery business, with the company setting up general logistics centers nationwide to meet the needs of an expanding online shopping and mail-order market. The company also has a substantial overseas business supported by companies within the Hyundai Group of companies and their customers.

Hyundai Group has raised around KRW2.66 trillion from selling assets in efforts to improve its finances, particularly after a downturn in the global shipping business impacted South Korea's conglomerates. In a number of instances, the non-core businesses have become a target of private equity investors.

In February, it was revealed that IMM Private Equity has been selected as the preferred bidder for HMM's liquefied natural gas (LNG) business in a deal worth KRW1.1 trillion ($1 billion). 

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• Topics
• North Asia
• Buyouts
• Industrials
• ORIX Capital
• South Korea
• buyout