‘Long Beach Container Terminal May be Sold Not at Home but Abroad’

Creditors in the United States gave Hanjin Shipping an ultimatum with regard to the sale of its Long Beach Container Terminal and Chapter 11. Chapter 11 is likely to be initiated if no final negotiator is determined by December 15 among Korea Line Corporation, Hyundai Merchant Marine and Hahn & Company. Then, the exercise of the rights of the largest and second-largest shareholders, Hanjin Shipping (54%) and MSC (46%), are limited to a significant extent.

In early September, a bankruptcy protection request in compliance with Chapter 15 was made for the terminal in New Jersey. “Chapter 11 for rehabilitation is based on the fact that Hanjin Shipping’s subsidiary TTI is an American corporation,” said an industry expert, adding, “Chapter 15 is about international insolvency and it is likely to be stopped once Chapter 11 becomes effective.”

At present, Hyundai Merchant Marine is trying to acquire the terminal with MSC by taking the terminal’s debts amounting to 300 billion won. However, the preferred bidder is Korea Line Corporation, which is looking to continue with negotiations until early January as stipulated in its contract.

According to industry sources, Korea Line Corporation has just started container transport and is highly likely to remain in the red for the time being after the acquisition. Hyundai Merchant Marine recently turned down Korea Line Corporation’s proposition for joint acquisition in this regard. They also point out that the efficiency of the terminal holds the key to its recovery.