HMM CEO Bae Jae-hoon Soothes Shareholders: "Considering Dividends and Early Redemption of Perpetual Bonds"

'Letter to Shareholders'
Considering Shareholder-Friendly Policies

Hae-jun Bae, CEO of HMM, is being interviewed by Asia Economy on the 27th. / Photo by Mo Honam munonam@

[Asia Economy Reporter Dongwoo Lee] HMM recently announced on the 13th that it is "considering various measures to enhance shareholder value" in relation to the recent stock price decline.

HMM CEO Bae Jae-hoon stated in a "Letter to Shareholders" on the same day, "HMM is considering shareholder-friendly policies including dividends," adding, "Currently, dividends are not possible due to the lack of distributable profits under the Commercial Act, but we will actively implement shareholder return policies once profits are generated." HMM's deficit stood at 4.4439 trillion KRW as of the end of last year.

Regarding the perpetual bonds, which have been pointed out as another cause of the stock price decline, the company explained, "For the 191st series perpetual bonds, whose step-up (interest rate increase) will occur next year, the company is reviewing the exercise of early redemption rights."

However, it was explained, "If the perpetual bonds are redeemed without conversion into shares, the debt ratio is expected to rise, worsening financial ratios, so the decision will be made considering the company's circumstances from a mid- to long-term perspective."

The company added that even if it requests early redemption, conversion is possible if bondholders apply for conversion. Regarding the redemption of the remaining 6th series perpetual bonds, early redemption requests can be made sequentially from 2023, when the 192nd series perpetual bonds reach five years since issuance.

Concerning the current situation where short selling is concentrated, the company stated, "Short selling is a legally permitted system, and the company has no way to artificially block legally occurring transactions," adding, "If signs of illegal trading occur, we plan to actively respond through proper procedures."

CEO Bae emphasized regarding rumors of a sale led by the largest shareholder, the Korea Development Bank, "The Korea Development Bank and the Korea Ocean Business Corporation are not devising artificial methods to lower the stock price to facilitate the sale of the company."