Hanjin Transportation sells its rental car business

Hanjin Transportation sold its rental car business to Lotte Rent-a-Car to focus on logistics, the company announced Wednesday.

Hanjin Transportation, a subsidiary of Hanjin KAL, sold the business, including 3,000 rental vehicles, for 60 billion won ($53.6 million) on Tuesday.

The proceeds will be invested in its logistics and parcel service, its IT management system and to improve the company’s overall finances. Its goal is to win a market share of more than 20 percent in Korean parcel services by 2023.

It currently has around 15 percent.

Hanjin Transportation plans to further restructure non-key businesses including real estate to pay more attention to its core businesses.

“We can’t specify what non-core businesses are at the moment since the logistics environment changes rapidly,” said Choi Dong-hyuk, a spokesperson from Hanjin.

“The proceeds will be used for improving Hanjin Transportation’s businesses, not for saving Korean Air Lines,” stressed Choi.

Negotiations on the deal with Lotte began in mid-February.

Last year, the company raised 40 billion won by selling two bus terminals.

“As of last year, our sales went up 5.7 percent on year to 2.06 trillion won while operating profit rose 115 percent on year to reach 90.6 billion won, the best in the company’s history,” said a spokesperson for Hanjin Transportation in a statement. “We’ll do our best to improve company value by strengthening our key businesses and improving management efficiency.”

BY JIN MIN-JI [jin.minji@joongang.co.kr]