[THE INVESTOR] Samra Midas Group, a South Korean construction firm that has grown through aggressive mergers and acquisitions, is eyeing expansion into the shipping industry.

SM Group in 2013 acquired Korea Line, once the nation’s fourth-largest shipping company that was on the verge of bankruptcy.

With the purchase, it continued to expand into the shipping industry, amid the industry’s grim outlook. 

Korea Line announced on Aug. 26 that it has acquired 5.01 million shares of Samsun Logix -- a mid-tier shipping company that is under court receivership -- held by Hong Kong-based debt trader SC Lowy at 9.3 billion won (US$8.33 million).

Korea Line also took over 26.7 billion won of Samsun Logix’s bonds from SC Lowy.

After the latest deal, Korea Line now holds 10.6 million shares of Samsung Logix to become the majority shareholder of the company with a 73.8 percent stake.

Earlier in April, Korea Line swapped 147.2 billion won debt for equity, creating 5.59 million shares as a result. The transaction made the shipper the largest shareholder of the debt-ridden shipper with a 38.9 percent stake, but not enough to consolidate its management.

Samsun Logix, shipping line that ranks in the top 10 among local competitors by capacity, had filed for bankruptcy protection in 2015. This was the second time for the shipper to enter court protection since 2009, in which Samsun Logix exited in two years.

But with Korea Line’s recent takeover, added with Samsun Logix’s corporate restructuring efforts, the company is expected to graduate from court protection soon. It will be able to stand on its own under the new owner Korea Line, industry insiders say.

SM Group also planned to acquire SPP Shipbuilding’s shipyard from its creditors earlier this year, but walked away from the deal.

By Ahn Sung-mi (sahn@heraldcorp.com)