Possible Selling of HMM
Amid Hyundai Merchant Marine’s negotiation going on to join the 2M, a global shipping alliance led by Maersk and MSC, a prediction is made that Maersk might take over Hyundai Merchant Marine if the troubled Korean shipping company gets on its feet again.
Even though it is still a prediction, if the prediction becomes a reality, it is highly likely that the sell-off of Hyundai Merchant Marine will receive strong backlash with a mounting criticism that the government sold a major national flag carrier for a giveaway price.
According to the shipping industry and creditors, a prediction is spreading that Maersk will discuss ways to buy equities in the Korean shipping company with the Korean government and the Korea Development Bank after its normalization. “If the price is right, there is no reason for not selling Hyundai Merchant Marine to Maersk,” a government official said.
Drewry, a UK shipping research organization, analyzed in a recently report that Maersk may take over Hyundai Merchant Marine or set up a joint venture with the company.
The takeover rumor surfaced as Hyundai Merchant Marine announced that they were negotiating over joining the 2M on June 23.
Earlier, Hyundai Merchant Marine negotiated to join the THE Alliance, a shipping alliance of which Hanjin Shipping is a member carrier, but oppositions by K-Line of Japan among others compelled Hyundai Merchant Marine to switch to the 2M.
Some industry experts analyzed that the stuck-up 2M decided to admit Hyundai Merchant Marine probably because the Korean government and creditors may have promised to give support to the 2M. “With this as a backdrop, it is likely that Maersk will begin to take over Hyundai Merchant Marine. In fact, the top management of Maersk visited the Korea Development Bank and met with Jeong Yong-seok, vice governor of restructuring in the middle of June. After the meeting, the Maersk side sent a positive signal about Hyundai Merchant Marine’s joining the 2M.
The point is that if the national carrier is sold to a foreign firm, it is highly likely that the Korean economy will incur bigger loss. If and when Hyundai Merchant Marine is sold and Hanjin Shipping makes no progress in charter fee negotiations and goes into a court receivership, global shipping giants will virtually dominate the domestic shipping market.