Which of Hanjin Shipping and Hyundai Merchant Marine Will Survive?

The South Korean government made an announcement on June 8 regarding the restructuring of Hyundai Merchant Marine and Hanjin Shipping.

According to the announcement, Hyundai Merchant Marine should succeed in joining a global shipping alliance, Hanjin Shipping should reach an agreement with ship owners in its charter rate negotiations, and any of the two failing to do so goes to court receivership. Industry insiders have predicted that one of the two will acquire the other in the end as the survival of both of them is rather unlikely.

“Now is not the time to decide which one of the two will survive and we need more time to make that decision,” said Deputy Prime Minister Yoo Il-ho in response to a question from a reporter at the press briefing that followed the announcement. He added, “One thing that is clear now is that the shipping sector is going through a restructuring process based on strict self-rescue efforts and a reasonable alternative measure will come into play when those efforts fail nonetheless.”

The alternative mentioned here refers to court receivership. Both the South Korean government and the creditors of the companies are adhering to their principle that they will resort to court receivership in a case where Hanjin Shipping or Hyundai Merchant Marine fails to meet their requirements.