Thanks to significantly improved financial conditions and surging global shipbuilding demand, South Korean mid-sized shipbuilder DH Shipbuilding (formerly Daehan Shipbuilding) plans to list on the KOSPI stock exchange in South Korea later this year.
South Korean financial institutions expect DH Shipbuilding’s initial public offering (IPO) to value the company at more than 1 trillion won (about US$730 million).
It is understood that DH Shipbuilding is a medium-sized shipbuilding company focusing on the construction of Suezmax and Aframax tankers. Its financial situation began to improve three years ago. In 2022, a consortium led by Korean private equity fund company KH Investment Group (KHI) spent 200 billion won to acquire Daehan Shipbuilding, holding a 95% stake.
The sale of Daehan Shipbuilding took 13 years. After bankruptcy reorganization in 2009, it was temporarily taken over by the Korean court. The creditor, Korea Development Bank (KDB), has been actively promoting its sale, but the shipbuilding industry was in a depression at the time and no buyers could be found.
In 2013, Daehan Shipbuilding saw a turning point when it was taken over by Daewoo Shipbuilding & Marine Engineering (DSME, now Hanwha Ocean), and its production and operations gradually returned to normal. As the shipbuilding market gradually heated up, the sale of Daehan Shipbuilding was once again put on the agenda.
In 2021, several South Korean companies expressed interest in acquiring Daehan Shipbuilding. On May 20, KHI formally signed the contract to acquire Daehan Shipbuilding and paid a 10% deposit. In 2022, KHI completed the acquisition of Daehan Shipbuilding and renamed it DH Shipbuilding.
This year, DH Shipbuilding received an order from Greek shipping company Sun Enterprises for two 158,000 DWT Suezmax oil tankers, with a total order value of 250 billion won (approximately US$180 million). The new vessels will use liquefied natural gas (LNG) dual fuel and be equipped with scrubbers. Delivery is expected in the first quarter of 2027.
DH Shipbuilding’s IPO plan comes at a time of global prosperity in the shipbuilding industry. In a report earlier this year, shipbroker BRS pointed out that the shipbuilding industry entered a super cycle in 2021, comparable to the boom period from 2003 to 2008. To date, DH Shipbuilding has accumulated more than three years of solid orders.