2 bidders vie for Hanjin’s most valuable assetsHyundai Merchant Marine (HMM) was one of the two final bidders for Hanjin Shipping’s core assets on Asia-U.S. routes on Thursday.
The sale is the final stage of Hanjin’s debt restructuring program since it applied for court receivership on Aug. 31.
HMM confirmed its participation through company filings Thursday. Industry sources said SM Group, owner of bulk shipper Korea Lines Corporation, is the other bidder for Korea’s once biggest shipping company’s core asset.
In a preliminary bid held last month, five parties showed interest in Hanjin’s routes including the Korea Shipowners’ Association and two private equity funds.
Once the sale process is complete, Hanjin Shipping - once the world’s seventh-largest shipper with a history of nearly seven decades - will be but a memory.
The sale includes a logistics network, five container vessels and crew for its Asia-U.S. routes as well as seven overseas subsidiaries. Hanjin’s 54 percent share of U.S. Long Beach Terminal has been added to the sale, which the bidders are particularly interested in.
Long Beach Terminal in California is a terminal capable of handling roughly 30 percent of the trade volume of the western coast of the U.S. It was one of the most valuable assets of Hanjin.
There is a risk to buying the terminal. A 46 percent stake is owned by the world’s second largest shipping line, MSC, and it owns priority rights to purchase the remaining stake. The sale of Hanjin’s stake was reportedly made based on the condition that the buyer takes responsibility for any possible legal dispute.
A preferred bidder will be selected by Monday and the main contract will be signed on Nov. 21. Payment will be completed by Nov. 28 according to the Seoul’s court.
The shipper also gave dismissal notices to all its sailors Thursday. The final working day was set for Dec.10 for Korean sailors, which number about 600, according to the company. Some 60 sailors who are aboard five container ships on the U.S. routes put up for sale were exempted, as they are included as part of the acquisition of assets.
According to the sailor’s union Thursday, there are about 225 sailors who have returned to Korea and 350 still at sea on 43 vessels.
“The Korea Shipowners’ Association has contacted 13 shipowners in the country and found 200 open positions for sailors,” said Moon Kwon-do, captain of the seized ship Hanjin Rome. “But it’s an open competition among all sailors in the nation.”
Massive layoffs following the failure of Hanjin are just beginning.
“The office workers have not yet been fired but we do not know our fate,” said Chang Sung-hwan, head of the union for office workers at Hanjin.
It is likely that about 2,000 of Hanjin’s employees will lose their jobs before the end of this year. Considering related businesses such as freight forwarders, the Korea Maritime Institute has projected that over 12,000 people may lose their jobs.
BY KIM JEE-HEE [firstname.lastname@example.org]
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