Deal of the Year – 2002 Bank Debt

Determining the bank debt deal of the year is usually the most challenging of all the awards we give. Of the hundreds of revolvers, term loans and refinancing totaling about $40bn done for the shipping industry each year, it is generally very difficult to determine a winner – but this year it was easy.

This year’s Bank Debt Deal of Year award goes to Citigroup, the Korea Development Bank and the Korea Exchange Bank for the $1.05bn facility that they arranged to finance Wallenius Wilhelmsen’s (WW) acquisition of Hyundai Merchant Marine (HMM)’s car carrier business, including the term charters with Hyundai Motors and Kia Motors (HMC/KMC). The NewCo, known as “Korea Ro-Ro”, is to be jointly owned by Wallenius 40%, Wilhelmsen 40% and HMC/KMC 20%.

There were several things we liked about this deal. Perhaps more impressive that its sheer size was the fact that it attracted more funding from foreign lenders than any previous Korean leveraged deal. This Norwegian/Korean transaction was also extremely complex, requiring securitization of cash flow streams into three tranches with multiple security packages and pricing.

Written by: carisk | Categories: Uncategorized | January 1st, 2003 | Add a Comment

Wilhelmsen & HMM: MERGER IN THE ORIENT

On Friday the 22nd of February, Wilh. Wilhelmsen ASA asked the Oslo Stock Exchange to suspend trading awaiting an announcement. Rumours were buzzing around Oslo that weekend but three main theories appeared; i) the Wilhelmsen family had had enough of life in the public arena and would tender for the roughly 60% of the economics they did not own. ii) The initial talks with Hyundai Merchant Marine had been successful and a takeover of the ailing Korean shipowner’s car carrier fleet would move forward. iii) The Wallenius family was moving out of shipping and was selling their 50% stake in Wallenius Wilhelmsen (WW) to the Oslo listed company. Well it wasn’t the first and the third is still a possibility (we will come back to that a little later).

But the second one is now a reality. Representatives from Wilhelmsen and Wallenius are currently in Seoul, performing due diligence on HMM’s car carrier division.

In this article we will look at the rationale(s) for the buyer and seller to enter into these talks and why we feel that there is more to this story than first meets the eye. Before we take a look at the potential transaction let’s take a look at the players involved and see if we can easily spot the reasoning for such a deal.