Hyundai Heavy Industries Holdings Secures 800 Billion KRW Investment Through Subsidiary's Pre-IPO

US Private Equity Firm KKR Signs Pre-IPO Agreement with Hyundai Global Service

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Heavy Industries Holdings has succeeded in attracting a total investment of 800 billion KRW through the pre-IPO (pre-Initial Public Offering) of its affiliate Hyundai Global Service.

Hyundai Heavy Industries Holdings announced on the 23rd that its board of directors approved the pre-IPO agenda for Hyundai Global Service. Accordingly, Hyundai Heavy Industries Holdings signed a main contract on the same day to sell 38% (1.52 million shares) of Hyundai Global Service to KKR, the largest private equity firm in the United States, for 646 billion KRW.

Additionally, according to the contract with KKR, Hyundai Heavy Industries Holdings will receive a dividend of 150 billion KRW from Hyundai Global Service's cash holdings, securing a total of 800 billion KRW including the sale proceeds. This fund will be used to foster future businesses in preparation for the 4th Industrial Revolution, such as robotics, AI, and hydrogen.

KKR is known to have valued the company at approximately 2 trillion KRW, focusing on Hyundai Global Service's growth through diversification of its business portfolio.

Since its launch in 2016 as a company specializing in the aftermarket service (A/S) of ship equipment, Hyundai Global Service has expanded its scope to eco-friendly ship retrofit services and smart ship platform business through ship digitalization.

In particular, last year it recorded sales of 1.009 trillion KRW and an operating profit of 156.6 billion KRW, surpassing 1 trillion KRW in sales within five years of its launch, and its operating profit has nearly tripled compared to 56.4 billion KRW in 2017, showing continuous growth.

KKR plans to invest through its Asia private equity fund and leverage its accumulated investment and operational expertise as well as global networks to accelerate Hyundai Global Service's growth in the global market by actively supporting eco-friendly related solutions and technology development.

A Hyundai Heavy Industries Holdings official stated, "The contract with KKR is meaningful in that Hyundai Global Service was valued at about 2 trillion KRW and laid the foundation to increase its corporate value by 3 to 4 times in the future," adding, "Through this investment attraction, Hyundai Heavy Industries Holdings will focus on fostering future businesses such as robotics, AI, and hydrogen as a holding company and will continuously discover the second Hyundai Global Service."