7 February 2024 (Lloyd's List) - THE sale of South Korean line HMM has fallen through after negotiations between majority stakeholders Korea Development Bank and Korean Ocean Business Corp and a local consortium of Harim and JKL Partners broke down over "different views on some details".

The parent of bulker player Pan Ocean and South Korean private equity firm JKL Partners had emerged as the preferred bidders for the two state agencies' 57.9% stake in December.

Negotiations to conclude the Won6.4trn ($4.8bn) deal were supposed to have been finish by January 23, but the deadline was extended to February 6.

Among the issues contributing to the deal's failure were reported disagreements concerning management rights and the share sale lock-in period.

Local media reported that Harim wanted full management control after taking over, while the two sellers insisted on being allowed to keep monitoring the company.

Harim also wanted to exclude JKL Partners from a five-year share sale limit to allow the fund to exit its investment in due course. The state-owned financial institutions reportedly did not agree to the exception.

KDB said in a statement that "though KDB and KOBC were in the talks with the preferred bidder under mutual trust over the past seven weeks, we were not able to reach an agreement over different views on some details".

Harim said in a stock market announcement that "negotiations were conducted on the main contents of the agreement between bondholders, but no agreement was reached".

It is unclear what KDB and KOBC now plan to do with their stake. KDB did not respond to a request for comment.

Another local consortium of Dongwon Group and LX International had previously participated in the bidding process.

Conditions have now changed somewhat, with liner profits down in 2023 from the year before and alliance shakeups creating future uncertainty.

Hapag-Lloyd, which had previously expressed interest in the stake and been snubbed, has announced it plans to leave The Alliance to team up with industry giant Maersk leaving HMM with other smaller Asian partners.

"Apart from the sale process, HMM makes great efforts to enhance its business capability for the swift response to the ever-changing market environment and will continue to secure a solid foundation for future growth," said a HMM spokesman.