Asset swap to 'strengthen long-term competitive edge'

16 LNG carriers exchanged for 12 oil tankers, $300M cash

SK Shipping to rebrand as 'K-LNG'

An LNG carrier operated by H-Line Shipping, the Vivirt City LNG, sails at sea. [H-Line Shipping brochure]
An LNG carrier operated by H-Line Shipping, the Vivirt City LNG, sails at sea. [H-Line Shipping brochure]

Private equity fund manager Han & Co. is restructuring the business lines of its two portfolio shipping companies, SK Shipping and H-Line Shipping, swapping vessel assets worth trillions of won to reorient SK Shipping around LNG and other gas carriers while adding an oil tanker portfolio to H-Line Shipping.

Han & Co. said Thursday the rebalancing is aimed at allowing each company to focus on its core competencies and strengthen its long-term competitive advantage.

Under the deal, SK Shipping will receive 16 LNG carriers from H-Line Shipping in exchange for 12 oil tankers and approximately $300 million in cash. H-Line Shipping is expected to broaden its stable revenue base by acquiring tankers already tied to long-term transport contracts with domestic and overseas cargo owners. The transaction is currently pending approval from cargo owners and lenders.

Once the deal closes, SK Shipping's assets will total approximately 11 trillion won ($7.77 billion) and H-Line Shipping's will reach around 5 trillion won. Both companies are set to emerge as specialized carriers with distinct areas of expertise through a strategy of focus and concentration.

Through the transaction, SK Shipping aims to bolster its gas carrier portfolio — spanning LNG and liquefied petroleum gas (LPG) vessels — and sharpen its competitiveness in clean energy transport. Operating 32 LNG carriers, the company will become Asia's largest and one of the world's top three LNG carriers. With 14 LPG carriers as well, SK Shipping is positioned to become a leading global gas shipping company in every sense.

SK Shipping also plans to rename itself "K-LNG" to mark the emergence of a flagship South Korean global LNG carrier.

Han & Co. expects SK Shipping's long-term growth outlook to strengthen amid the global energy transition. Shell, the British energy major, has projected that global LNG demand could rise by as much as 68 percent by 2040 compared with 2025 levels. LNG's share of maritime energy trade is forecast to reach around 30 percent by 2050 — roughly double its current level — as surging power demand driven by AI data center expansion increases the need for stable, low-carbon energy supply.

The transaction is also expected to contribute to national energy security. According to the Ministry of Oceans and Fisheries, South Korean-flagged carriers transported just 34.5 percent of the country's LNG imports in 2024, leaving roughly two-thirds dependent on foreign operators. The government has set a target of maintaining a domestic carrier utilization rate of at least 70 percent for key energy shipments. SK Shipping's rise as a leading global LNG carrier is expected to help reduce that dependence.

Meanwhile, H-Line Shipping will add an oil tanker portfolio to its existing dry bulk and pure car and truck carrier (PCTC) fleet, increasing the share of top-tier domestic cargo owners it serves. The company plans to further strengthen its core business capabilities through long-term partnerships with domestic clients and grow into a domestic cargo owner-focused platform spanning the broader energy infrastructure supply chain, including crude oil and raw materials transport.

The rebalancing is drawing attention as a rare case of a private equity fund driving the creation of a major domestic infrastructure company. Both shipping firms were in financial distress when Han & Co. acquired them. Through proactive investment and strategic restructuring after the acquisitions, both have grown into "global champions" with top-tier profitability.

Han & Co. established H-Line Shipping in 2014 by acquiring the dedicated carrier division of Hanjin Shipping, then expanded the company in 2016 by absorbing the bulk carrier division of Hyundai Merchant Marine, now HMM. In 2018, Han & Co. also took over management control of SK Shipping. The firm shifted both companies away from spot-market exposure toward stable long-term transport contracts and built out risk management systems.

Earlier this year, Han & Co. announced the sale of 10 very large crude carriers (VLCCs) from SK Shipping to Pan Ocean. SK Shipping plans to use the approximately 973.7 billion won proceeds from that transaction to fund new growth initiatives.

The series of portfolio restructuring moves has translated into improved earnings. H-Line Shipping's operating profit rose from 127.3 billion won in 2015, shortly after its founding, to 369.4 billion won last year — nearly tripling over a decade. Its operating profit margin last year stood at approximately 28 percent, among the highest in the industry. Over the same period, EBITDA, a measure of cash generation, grew nearly fourfold from 189.5 billion won to 753.8 billion won.

SK Shipping's operating profit rose from 73.3 billion won in 2018, when Han & Co. acquired it, to 504 billion won in 2025 — roughly 6.8 times higher over seven years. EBITDA over the same period grew approximately 3.4 times, from 231.7 billion won to 781.1 billion won.


arete@heraldcorp.com