Hanjin Shipping’s Assets
Hyundai Merchant Marine Co. (HMM) and four other organizations, such as Samra Midas (SM) Group, Korea Shipowners’ Association and Hahn & Company, had submitted a preliminary bid for the assets of Hanjin Shipping Co.’s Asia-U.S. route, as Hanjin is broken up as part of a restructuring plan. Earlier, industry sources expected that HMM would to be the sole bidder for the Hanjin assets. On the other hand, Denmark’s Maersk Line, the largest container shipper in the world, and Geneva-based Mediterranean Shipping Co. (MSC), the second largest, did not participate in the bidding.
According to shipping industry sources on October 28, the five companies had submitted a letter of intent (LOI) to the Seoul Central District Court, which is handling Hanjin’s insolvency proceedings, for the acquisition of Hanjin Shipping’s Asia-U.S. route.
Immediately after the initial bidding closed, HMM have said in an official statement, “We have submitted a LOI to take over Hanjin Shipping's key operations. We will decide whether to make a final takeover proposal after we complete due diligence. We are currently consulting experts to secure our medium and long-term competitiveness. Accordingly, we are considering comprehensive measures to strengthen our competitiveness, including the acquisition of Hanjin Shipping’s assets and workforce.”
Other entities have announced their intent to pursue the Hanjin assets. SM Group, which took over Korea Line Corp., a mid-sized shipping company which was under court receivership, had submitted a bid. Hahn & Company, a South Korean private equity fund (PEF) firm which bought the H-Line Shipping from Hanjin Shipping’s bulk shipping business division, and the Korea Shipowners’ Association, which represents dozens of shipowners and operators, said it had as well. The Korea Shipowners’ Association had first joined the bid under the name of the association and then plans to attract domestic investors later. The shipowners’ association is expected to purchase Hanjin Shipping’s Asian route with small and mid-size shipping companies.
Contrary to earlier expectations that HMM would be the sole bidder, four other shipping groups took part in the bid largely due to exceptional conditions offered by the government and creditors that are under pressure.
Five shipping operators that submitted the LOI will decide whether to make a final takeover bid by November 7 after conducting due diligence on the asset from October 31 to November 4.