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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Private equity firm highlights earnings growth and business restructuring since 2018 acquisition
Hahn & Company (Hahn & Co.), a South Korean private equity firm, announced on Feb. 11 that it has agreed to sell 10 very large crude carriers (VLCCs) owned by its portfolio company SK Shipping to Pan Ocean for approximately KRW 973.7 billion.
The 10 vessels are currently deployed under long-term cargo transportation contracts with major domestic shippers. The associated long-term contracts will also be transferred to Pan Ocean as part of the transaction.
SK Shipping plans to invest the approximately KRW 1 trillion secured through the deal into new growth engines.
Hahn & Co. acquired management control of SK Shipping in 2018 with an investment of KRW 1.5 trillion. Since then, the firm has restructured the company’s business model by shifting away from spot operations—which are highly sensitive to freight rate volatility—and toward stable, long-term contracts.
Under long-term agreements, a fixed margin is added to operating costs, enabling stable profit generation regardless of market conditions.
The company also strengthened its client portfolio by signing long-term shipping contracts with leading domestic and international shippers, including QatarEnergy, the world’s largest liquefied natural gas (LNG) producer, while expanding its fleet of eco-friendly vessels.
At the time of acquisition in 2018, SK Shipping’s operating profit stood at KRW 73.3 billion. By 2024, operating profit had increased to KRW 395.7 billion.
During the same period, earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 2.8 times, from KRW 231.7 billion to KRW 640.9 billion, according to Hahn & Co.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
