Efforts for Survival
Hyundai Merchant Marine, which is suffering from financial difficulties due to the recession in the shipping industry, is seeking to sell its oil tanker business. It is an additional measure after Chairman Hyun Jeong-eun donated her own money and the company negotiated over charter costs. It is also considered the company’s strong will for its revival. In particular, the oil tanker business division is a lucrative investment which are attracting attention from some shipping companies.
According to industry sources on March 2, Hyundai Merchant Marine is trying to sell its oil tanker business under the bulk carrier division. The sale includes the company’s 13 ships, including four Very Large Crude Carrier (VLCC), two SuezMax Tankers and seven petrochemical product carriers, related ship chartering contracts and seven employees. It is an additional measure for the previous measures, which were announced on Feb. 2, in case the sale of its bulk shipping business, Busan container terminal and Hyundai Securities are delayed.
The oil tanker unit is under the bulk carrier division, which includes oil tanker, liquefied natural gas (LNG) carrier, product carrier, bulk tamper, bulk carrier and project ship businesses. The company sold its LNG carrier business in 2014, and signed a formal sales contract for the bulk carrier business on Feb. 5. Hyundai Merchant Marine will sell its bulk carrier unit to H-Line Shipping for 120 billion won (US$97.72 million), including 420 billion won (US$342.02 million) of debts.
The bulk carrier unit posted 805.7 billion won (US$656.11 million) in sales in the third quarter of 2015, accounting for 17.35 percent of the company’s total revenues. It is the second most lucrative segment, following its container business, which turned over 3.48 trillion won (US$2.84 billion), or 75.02 percent. The oil tanker unit accounts for about 20 percent of the total revenue of the bulk carrier division.
In regard to the sale of its oil tanker unit, a Hyundai Merchant Marine official said, “We are currently considering it as part of the measures but nothing is confirmed or decided yet.”