The state-run Korea Development Bank and Korea Ocean Business Corp., the two largest shareholders of debt-ridden shipping company HMM, are seeking to sell their shares for at least 5 trillion won ($3.9 billion), according to industry sources Friday.

The two organizations said they are selling a combined 40.65 percent controlling stake in HMM, together with perpetual convertible bonds worth 2.68 trillion won.

A perpetual bond has no maturity date and can be converted into equity. From 2018 to 2020, the two organizations bought convertible bonds from HMM to lower its debt ratio.

Depending on the amount of bonds converted, the deal price could surge to some 10 trillion won. Last year, HMM, the world’s eighth-largest container ship operator, posted 18.6 trillion won in sales and 9.9 trillion won in operating profits.

Possibly in recognition of overpricing concerns, main creditor KDB kept the door open to negotiations, saying it could discuss more detailed deal conditions with a potential buyer to minimize the impact on the market.

The deadline for pre-bid proposals was set for Aug. 21 before a preferred bidder is announced. The state-run bank aims to complete the sale process within the year.

Competition has already heated up, with big names such as Hyundai Motor Group, Posco Group, GS Group and SM Group cited as potential bidders.

So far, SM Group, whose businesses range from manufacturing and construction to shipping, is the sole bidder that has publicized its interest in the deal.

SM Group Chairman Woo Oh-hyun recently told reporters the group is willing to pay around 4.5 trillion won for the takeover under the condition that KDB and KOBC do not turn their bonds into equity due to the higher financial burden of payment.

Hyundai Motor Group, the world’s third-largest carmaker, on the other hand, seems to stay aloof on the deal. A company official said there has been no meaningful discussion on the matter because the group already owns its own shipping unit, Hyundai Glovis.

Experts remained mixed about the profitability of the shipping industry overall despite its stellar performance during the COVID-19 pandemic.

HMM also suffered a 90.3 percent plunge in operating profits in the first quarter this year compared to a year prior.

“The shipping industry tends to experience fluctuations due to constant changes in ocean freight rates,” said Koo Gyo-hoon, an international trade professor at Taejae University. “HMM seems to have solid corporate value based on its latest performance. But a potential buyer should take into account the limitations of the business itself.”

HMM, formerly known as Hyundai Merchant Marine, was affiliated with Hyundai Group until 2015. After years of sluggish sales, the company was split off from the group and received funding from the two state-run creditors.