South Korea’s policy lender Korea Development Bank (KDB) is set to sell its stake in Hanwha Ocean Co. (59,738,211 shares, or a 19.5 percent stake).

This move comes 25 years after KDB acquired a stake in Daewoo Shipbuilding & Marine Engineering Co., Hanwha Ocean’s predecessor, through a debt-to-equity swap in 2000. According to sources from the financial sector on Monday, KDB conducted a demand survey that day to sell its Hanwha Ocean shares through a block deal, or off-hours bulk trading.

Approximately 4.3 percent, or 13 million shares, of its holdings was involved in the demand survey. KDB plans to divide its holdings into 3 to 5 percent portions and sell them to multiple buyers based on the survey, sources said. This approach appears to have stemmed from the difficulty of finding a single buyer for the entire stake and the possibility that a purchaser could become Hanwha Ocean’s second-largest shareholder.

Sources noted that KDB’s decision to sell its stake was driven by the sharp rise in stock prices amid a boom in Korea’s shipbuilding industry, providing an opportune moment to recover its investment.

Hanwha Ocean’s stock price rose 3.2 times from 27,800 won ($19.35) per share on November 6th, 2024, just before Donald Trump’s election to the U.S. presidency, to 89,300 won per share as of the closing price on Monday.

KDB is expected to eventually sell off its entire stake, currently valued at over 5.3 trillion won, according to authorities. The disposal plan for the remaining shares will be decided based on market conditions.

The bank’s need to strengthen its asset soundness also influenced its push for the sale. KDB currently has a Bank for International Settlements (BIS) capital adequacy ratio of 13.9 percent, the lowest among Korea’s 20 major banks. The ratio is expected to fall further to around 13.7 to 13.8 percent by the end of the first quarter of 2025, while regulatory authorities are requiring banks to maintain a BIS capital ratio that is not higher than 13 percent. Since risky assets like stocks carry a 250 percent risk weighting based on market value, holding a large volume of stocks lowers the ratio.

The heightened importance of policy financing to overcome the shock of the Trump administration’s tariff measures also played a role in the KDB’s decision to sell its Hanwha Ocean stake, according to sources.

Hanwha Ocean’s largest shareholder is Hanwha Aerospace Co., which held a 23.14 percent stake as of the end of 2024. Including related parties, Hanwha Group’s total stake amounts to approximately 46.28 percent.

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