After turning a profit for the first time in 14 years, South Korean medium-sized shipbuilder K Shipbuilding (formerly STX Offshore & Shipbuilding) plans to go public this month with a transaction valuation of 500 billion won (approximately US$364 million), which is expected to bring considerable returns to investors.
According to foreign media reports, a consortium consisting of KH Investment Group (KHI), a Korean private equity fund company focusing on small and medium-sized mergers and acquisitions, and United Asset Management Company (UAMCO), a Korean non-performing asset management company operated by major Korean banks, is seeking to sell K Shipbuilding and has submitted documents to several accounting firms to select the lead manager for K Shipbuilding’s listing for sale this month.
The sale comes at a time when South Korean shipbuilding companies are entering a super cycle, with KHI and UAMCO planning to sell 99.58% of K Shipbuilding’s shares, including KHI’s 49.79% stake.
Foreign private equity investors will not be able to participate in the transaction, which is intended to seek a Korean buyer. South Korea’s KG Group is considered a potential buyer. The group was founded in 2003 and has expanded into chemicals, steel and logistics through a series of mergers and acquisitions.
According to reports, the acquisition price and the management capabilities of potential buyers are key considerations for KHI and UAMCO. In addition to the sale of equity, UAMCO also hopes to recover the 150 billion won debt it issued to K Shipbuilding through debt restructuring.
K Shipbuilding’s predecessor, STX Offshore & Shipbuilding, was once the world’s fourth-largest shipbuilding company, with 1,500 employees at its peak. However, after the 2008 financial crisis, STX Offshore & Shipbuilding suffered a severe blow due to cash flow constraints caused by the continued downturn in the global shipbuilding industry and its previous excessive expansion of international business.
In 2013, STX Offshore & Shipbuilding began debt restructuring; in 2016, the Seoul Central District Court approved STX Offshore & Shipbuilding’s self-rescue restructuring plan; in July 2017, STX Offshore & Shipbuilding completed debt restructuring and was able to resume normal order acceptance; In 2018, the creditor Korea Development Bank issued a prepayment guarantee for it, enabling it to secure a new order for two chemical/product tankers.
Since then, its creditor has repeatedly sought to sell STX Offshore & Shipbuilding. In 2021, a consortium led by KHI acquired 95% of STX Offshore & Shipbuilding for 250 billion won and subsequently renamed it K Shipbuilding.
It is worth noting that before the announcement of the sale, K Shipbuilding had experienced losses for 14 years and successfully turned losses into profits in 2024. In 2024, K Shipbuilding achieved an operating profit of 11.2 billion won, while in 2023 it suffered a loss of 59.6 billion won.
In the first quarter of 2025, K Shipbuilding achieved an operating profit of 12.7 billion won, a year-on-year increase of 405%, and operating revenue of 285.6 billion won, a year-on-year increase of 22.7%. K Shipbuilding’s operating revenue for the whole of 2025 is expected to exceed 1 trillion won, which is the first time it has exceeded the 1 trillion won mark since 2019.
Clarksons data shows that K Shipbuilding currently has an order backlog of nearly 30 vessels, and MR product tankers are the core business of the shipyard. K Shipbuilding, once regarded as a “distressed” enterprise, has now achieved an amazing turnaround, with the delivery date of orders on hand scheduled to 2027 and the average utilization rate of the shipyard reaching 110%.
Currently, K Shipbuilding’s enterprise valuation is between 700 billion won and 1 trillion won, about 2 to 2.5 times its book value. This multiple is lower than the price-to-book ratio of 4.58 of another Korean medium-sized shipyard, DH Shipbuilding (formerly Daehan Shipbuilding), which is also controlled by KHI.
In addition to K Shipbuilding, KHI-controlled DH Shipbuilding has also made a big move recently, planning to be listed on the KOSPI Stock Exchange in South Korea later this year. The enterprise valuation of DH Shipbuilding’s initial public offering (IPO) exceeds 1 trillion won (about US$730 million).