A consortium led by Harim Group was picked Monday as the preferred bidder for South Korea's top container shipper HMM Co., controlling shareholders said, heralding the start of its privatization.

Last month, two state agencies -- the state-run Korea Development Bank (KDB) and the Korean Ocean Business Corp. -- conducted a final bidding for their controlling stake in HMM, drawing the Harim-JKL Partners consortium and Dongwon Group.

The Harim-led consortium reportedly offered to pay some 6.4 trillion won (US$4.92 billion) for the 398.8 million shares up for sale, which KDB and the corporation acquired in a debt-for-equity swap seven years earlier.

The bid price narrowly beat that of Dongwon, and the Harim-JKL Partners consortium received better points in other factors, including how to finance the takeover, according to sources.

The two state institutions are slated to sign a stock purchase agreement with the Harim-led consortium after negotiations on takeover details before finalizing the deal during the first half of next year.

Harim Group owns Harim Co., the country's largest poultry-processing company, and JKL Partners is a major private equity fund.

The two state agencies had planned to announce the prime bidder by early December, but it has been delayed due to the Harim consortium's several conditions for a takeover.

One of the conditions is its demand that the sellers delay their conversion of perpetual bonds into equity for three years after the purchase, according to watchers.

The Harim-JKL Partners consortium reportedly withdrew their demands ahead of the announcement of the prime bidder.

A successful takeover would raise Harim Group's assets to 42.8 trillion won, making it South Korea's 13th-biggest conglomerates, up 14 notches from its current rank.

Currently, Harim Group owns Pan Ocean Co., South Korea's leading bulk carrier and No. 2 shipping company by sales. (Yonhap)