Harim Group Moves Forward on US$895 Million Takeover of Pan Ocean

Korea’s largest animal feed and livestock group, Harim Group, is moving forward on its US$895 million takeover of the distressed dry bulk carrier, Pan Ocean which has been in receivership since 2013.

In December 2014, Harim Group, partnering with JKL Partners, was chose as the top bidder for Pan Ocean, bidding 1 trillion won (US$895 million) for the carrier company. The acquisition is expected to provide a high level of synergy and cost savings for Harim, which has been lacking efficient, reliable transportation from the U.S. and Brazil for the grain and corn it uses in its feed products.

Unlike Japanese grain companies which have existing manufacturing operations and export terminals in both the U.S. and Brazil, Korean depends almost entirely upon foreign companies such as ADM, Cargill, and Louis Dreyfus for all of its grain supplies and shipping services.

Following a review of Pan Ocean’s books that revealed that the company was carrying more debt than expected, Harim requested a capital reduction, resulting in opposition to the deal by minority stake holders, however the court stepped in and offered a capital reduction of 1.25 to 1. Approximately 87% of Pan Ocean’s creditors, and 61.6% of the company’s shareholders who attended the vote approved the takeover, which is scheduled to be completed by the end of July.

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