Merger of Local Shippers
An argument that Hyundai Merchant Marine and Hanjin Shipping should be combined with each other as a single national flag carrier is becoming more and more persuasive.
“It is said that the THE Alliance has one spot for South Korean national flag carriers in view of the number of regular lines, the number of vessels in operation, the size of the Port of Busan, etc.,” a South Korean government official said on May 29, adding, “For both Hyundai Merchant Marine and Hanjin Shipping to join the alliance, the six global shipping companies in the alliance have to provide their consent before September this year, which is practically unlikely.”
Earlier, it was said that Hyundai Merchant Marine would be able to join the alliance through its restructuring process consisting of charter rate adjustment, debt restructuring and voluntary agreement. This means Hyundai Merchant Marine should take the share of Hanjin Shipping or be combined with it in order to become a member of the alliance.
“The government has provided the same conditions for both companies, that is, donation by the largest shareholders, charter rate reduction and debt restructuring,” said another official, continuing, “If one of the two fails to meet the requirements, there is no way but the other one absorbing it after a court receivership procedure.”