Hyundai Merchant Marine Co., South Korea’s No. 2 shipper, is considering bidding for its bigger local rival Hanjin Shipping Co.’s Asia-U.S. route, industry sources said Tuesday.
According to the sources, Hyundai Merchant, currently under a creditor-led debt restructuring scheme, is planning to submit a preliminary bid for Hanjin Shipping’s route, seen as the most lucrative, and ships that are up for sales.
Last week, part of cash-strapped Hanjin Shipping Co.’s assets went up for sale as the company is struggling to raise the cash needed to repay debts and unpaid bills.
The country’s No. 1 shipper, which is currently under receivership, got the nod from a local court to sell its Asia-U.S. route, including manpower, as well as vessels and 10 overseas operations.
The Seoul Central District Court will receive letters of interest from potential buyers until Oct. 28. Potential bidders are required to offer final bids by Nov. 4 and will be given chances to conduct due diligence.
The asset sale will be completed by the end of next month, but the prices were not determined.
Hanjin Shipping’s Asia-U.S. route logs sales of up to 4 trillion won annually, and its market share stands at 7 percent, the sixth-largest among global shippers.
Hyundai Merchant, a member of global shipping alliance 2M, is planning to expand its fleet, so it wants to buy vessels from Hanjin Shipping.
Hanjin Shipping was put under receivership early last month as its creditors, led by the state-run Korea Development Bank, rejected its latest self-rescue package worth 500 billion won, which fell short of the 700 billion won demanded by its creditors.
Its court receivership sent ripples through the global shipping network and left more than half of its ships stranded at sea.
Hanjin Shipping badly needs cash to repay debts and meet unpaid service bills. At the end of June, its debt reached 6 trillion won.
Earlier, the government said Hyundai Merchant would consider taking over Hanjin Shipping’s healthy assets such as port terminals and global business networks.
Source: YonhapPrevious Next