이 기사는 2020년 05월 27일 08시00분 thebell에 표출된 기사입니다

The value of Hahn & Company (Hahn & Co)’s H-Line Shipping has more than doubled over six years.

The buyout firm is replacing investors in its H-Line Shipping to provide an exit opportunity to existing backers. It will set up a new special purpose vehicle (SPV) which will acquire a 100 percent stake in H-Line Shipping. The SPV is expected to be formed with equity contributions of approximately 1 trillion won ($804 million) and senior loans worth 750 billion won.

At the end of last year H-Line Shipping’s net debt stood at 1.75 trillion won. The value of the company, calculated by adding net debt to the entire equity value, is 3.5 trillion won. This represents more than a two-fold increase from 2014 when the company was founded.

H-Line Shipping’s enterprise value (EV) in 2014 was estimated at 1.6 trillion won. It can be calculated by adding net debt at the end of 2014 to the company’s equity value calculated using the conversion price of convertible notes issued by H-Line Shipping to Hahn & Co that year.

In comparison, H-Line Shipping’s peer companies Korea Line Corporation and KSS Line have EV/EBITDA (earnings before interest, taxation, depreciation and amortization) multiples of 10x and 8.1x respectively. The value of H-Line Shipping calculated by multiplying its 2019 EBITDA of 303.7 billion won by these multiples ranges from 2.45 trillion won to 3.03 trillion won.

“H-Line Shipping is not only focused on the shipping business but opportunities to expand into business areas of logistics and infrastructure. This is also a key point of its IPO (initial public offering) marketing campaign,” an industry insider said. “The company could be valued higher if the current level of profit is maintained.”

H-Line Shipping is currently under contract with high-quality shippers such as POSCO, Korea Gas Corporation and subsidiaries of Korea Electric Power Corp. (KEPCO). It also benefits from contracts with an average remaining life of around 10 years, which could help insulate the company against the industry volatility.

H-Line Shipping’s operating income margin has been maintained around 25 percent since it surpassed 20 percent in 2014. “H-Line Shipping generates stable earnings based on long-term contracts and fixed rates,” said an official from a credit rating agency.

Hahn & Co founded H-Line Shipping in 2014 to acquire 95 percent of Hanjin Shipping’s bulk-carrier business. It bought the remaining stake in the company over the following two years. In 2016 H-Line Shipping also made a bolt-on acquisition of Hyundai Merchant Marine (HMM)’s bulk carrier unit for 120 billion won.

(Reporting by Byung-yoon Kim)