New Owner of Long Beach Terminal
The Bankruptcy Division of Seoul Central District Court said that Korea Line, an affiliated with SM Group, was selected as the preferred bidder for Hanjin Shipping’s core assets on its Asia-U.S. route on November 14 and the final deal will be signed on the 21st.
The bidding price will be around 200 billion to 300 billion won (US$170.87 million to 256.3 million). A local court official said, “Korea Line had offered a more competitive bid price and better employment buyout terms than Hyundai Merchant Marine. We didn’t choose any back-up bidder.” Five companies, including Hyundai Merchant Marine, SM Group, Korea Shipowners’ Association-led consortium and Private Equity Fund, participated in the preliminary bidding but only Hyundai Merchant Marine and SM Group submitted their final bids.
The Seoul Central District Court put up Hanjin Shipping's lucrative assets, such as the Asia-U.S. route, the Long Beach Terminal in California, seven overseas subsidiaries, five vessels and related crew members and networks on Hanjin’s Asia-U.S. route, for sale.
SM Group will take legal procedures to take over the Asia-U.S. route and the terminal in the near future. In order to acquire the stake in the Long Beach Terminal, the group still need to negotiate with Switzerland-based MSC, the second largest shareholder.
SM Group has now established a foothold to jump into a total shipping group with bulk carriers and container ships by acquiring Hanjin Shipping’s Asia-U.S. route this time after Korea Line and Samsun Logix. The group has been considered a master of merger and acquisition with its 20 subsidiaries. Hanjin Shipping employees have hoped the company to be acquired by SM Group, which has more sound financial stability than Hyundai Merchant Marine.
A Hanjin Shipping official said, “Since SM Group has no crew members for container ships, it will absorb Hanjin Shipping’s ground crew members immediately.”