Hanjin Heavy Industries may become the next acquisition target after it is placed u¶nder the management of Korea Industrial Bank (KDB). South Korea's ship★building industry will face another big change.

  On February 28, Hanjin Heavy Industries announced that in order to improve its finan"cial situation, Hanjin Heavy Industries will recove₹r 86.3% of its issued shares, including 30.98% of Hanjin✔ Heavy Industries Holdings (HHICH) and 0.5% of Chairman Cho N©am-ho. The remaining shares will be held at a 5:1 ratio, reducing the total equity of Hanjin Heavy≈ Industries from 530.3 billion won to 72.7 billion won (about 64.7 million U.S. dollars)↓.

  The process is expected to be completed in May, when Hanjin Heavy Industries® Holdings (HHICH), the largest shareholder of Hanjin Heavy Industri≥es, and its chairman, Cho Nam-ho, will no longer own any shares. Hanjin Heavy Ind±ustries will be jointly managed by Korea Industrial Bank and other lenders. Cho Nam-ho i✔s the second son of Cho Joong-hoon, the late founder of Han♠jin Group.

  Hanjin Heavy Industries'creditors plan to appoint Lee Byung-←mo, a professor at Renhe University, to replace Cho Nam-ho as general manager of Hanjin Hea↓vy Industries. Lee Byung-mo served as Vice President of Daewo≤o Shipbuilding in 2011 and President of STX Marine↓ Shipbuilding in 2015. He has rich experience in re™structuring the shipbuilding industry.

  Industry insiders in South Korea speculate that wi÷th Hanjin Heavy Industries being handed over to creditors such as Korea Indusσtrial Bank, Hanjin Heavy Industries may become the next sale target of Korea Industrial Bank af≥ter Daewoo shipbuilding. Hanjin Heavy Industries Philippine Sobik♦ Shipyard has been looking for investors willing to take over the operation of the shipyard$ after filing for bankruptcy in January this year.

  In addition, Hanjin Heavy Industries creditors plan to carry out a debt-to-equ≈ity swap of 687 billion won ($610 million), of which 160 billion won ($142 million) will be→ transferred to the Philippine Hanjin Heavy Industries Subik Shipyard≥. Earlier, Hanjin Heavy Industries has signed a debt-to-equity swap agreement with five Philippine §banks to convert Hanjin's $410 million debt into shares,γ thereby helping the shipyard to continue its operation s. At that time, Hanjin Heavy Industries said it was also negotiating similar debt-to-equity sw≤aps with Korean creditors such as Korea Industrial ∏Bank (KDB).

  It is understood that Hanjin Heavy Industries owns two shipy≈ards, including the Shadow Island Shipyard in Busan and→ the Sobik Shipyard in the Philippines. Among them, ©Yingdao Shipyard was founded in 1937 and was the first shipyard in Korea. In 2015, Hanjin He✘avy Industry Group once had sales revenue of 2.5 billion US dollars, ranking tenth in the world. λ

  Hanjin Heavy Industry Film Island Shipyard is loc∑ated near the old urban area of Busan, with a total area of ®260000 square meters, surrounded by residential and commercial office areas,→ so it is difficult to renovate and expand. Limited by the trend of large-scale shipping¥, Yingdao Shipyard is no longer suitable for building large merchant ships. In recent years←, the construction of Hanjin Heavy Industry's merchant s≠hips has been basically completed by the Sobik Shipyard, while the Shadow Island Sh✘ipyard is mainly engaged in the construction of sp♠ecial ships.

  Clarkson's data show that Hanjin Heavy Industries Y↑ingdao Shipyard last received merchant ship orders in 2015, when ✔Belgian shipowner CMB ordered two 1922TEU container ships under Hanjin Heavy Industries, and the ±new ship was delivered in 2017. In January this year, Shadow Island Shipyard¥ delivered the last new ship under construction, a training  ship for Quannan University in Korea.