The headquarters of HMM in central Seoul / Newsis

The possible privatization of HMM Co. will depend on the stock market and situations in the shipping sector, the country's oceans minister said Thursday.

South Korea's top shipper, formerly known as Hyundai Merchant Marine, has been under a creditor-led debt restructuring scheme since 2016, when it lapsed into a credit crunch following years of losses.

There have been growing calls for its swift privatization, given the recent improvement in the global shipping industry and the company's stellar performance.

In August, the oceans ministry officially made clear its push for privatization by gradually reducing public institutions' stakes in HMM.

State agencies hold a controlling stake in HMM, with the state-run Korea Development Bank holding the largest stake of 20.69 percent. The Korea Ocean Business Corp. has a 19.96 percent share, and the Korea Credit Guarantee Fund holds 5.02 percent.

In case their convertible bond holdings are converted into shares, their stake will go up to 74 percent.

"The privatization would be difficult with a 74 percent stake, so we will review shipping industry circumstances with long-term perspectives to carry out the stake sale," Oceans Minister Cho Seung-hwan said during a parliamentary audit into his ministry.

The government will also "comprehensively" consider the industry and the overall stock market, and continue consultations with related parties concerned, including the Financial Services Commission, he added.

In the first half of this year, the shipper saw net profit surge more than 1,500 percent on-year to a record 6.06 trillion won (US$4.31 billion), and sales jumped 87 percent to a fresh high of 9.95 trillion won.

The strong performance was attributable to rising freight rates on all routes, including those to the Americas and Europe, amid the post-pandemic recovery, officials said.

But shares in HMM dropped 40 percent over the past year to close at 18,350 won on the Seoul bourse Thursday in tandem with a lackluster market performance. (Yonhap)