HMM mulls buying Hanjin’s U.S.-Asia assetsHyundai Merchant Marine (HMM), which has managed to sail through the global container shipping industry’s overcapacity crisis relatively unscathed, is now eyeing core assets put up for sale by its beleaguered Korean rival Hanjin Shipping.
Industry sources said Tuesday that Hyundai Merchant Marine is likely to participate in preliminary bidding to acquire operations on Hanjin Shipping’s Asia-U.S. route.
While a spokesman for Hyundai Merchant Marine said a final decision had not been made yet, he noted that the company was “open to all acquisition options of Hanjin’s assets that prove strategically fit.”
The Seoul Central District Court, which is managing Hanjin Shipping’s assets, put the shipping line’s core assets up for sale last Friday, including logistics for its Asia-U.S. route as well as seven overseas subsidiaries and five container vessels.
Hanjin’s shipping route to the United States is one of its highest-value assets, at one point reaping 3 to 4 trillion won ($2.6 to $3.5 billion) in annual revenue. Hanjin Shipping used to account for roughly 7 percent of the route’s business, ranking sixth among global players.
But after the company filed for court receivership, its business networks on the route started to fall apart, and the court decided to put the operations up for sale before they further deteriorate.
Although Hyundai Merchant Marine is considering a preliminary bid, it is doubtful whether it will actually go through with the acquisition. The two Korean shipping lines’ operations on the Asia-U.S. route already substantially overlap.
The court will accept letters of intent until Oct. 28 and allow for due diligence until Nov. 4 before the main bidding takes place on Nov. 7.
While Hyundai Merchant Marine was mulling a bid, the labor union of clerical workers at Hanjin Shipping and the company’s management met Tuesday to discuss restructuring measures. While the sinking company is considering voluntary retirement and additional layoffs to downsize, the labor union is demanding such restructuring take place after Hanjin’s mergers and acquisitions are completed.
As of the first half of this year, there are 700 clerical workers on land and 728 workers at sea.
Hanjin Shipping requested court approval to pursue a merger and acquisition last Wednesday, and accounting firm Samil PricewaterhouseCoopers was selected to help manage the deal the next day.
BY JIM JEE-HEE [firstname.lastname@example.org]
with the Korea JoongAng Daily
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