HMM has said that the shipping company will respond to a slump in the shipping industry by using super-large ships and boosting sales efficiency, but external variables are expected to impede the sale of the company.
According to a 2024 maritime and fisheries outlook report released on Feb. 15, the Korean shipping sector’s sales and employment are expected to decline by 11.4 percent and 6.0 percent, respectively, from 2023. In addition, 67.5 percent of the shipping companies surveyed said that poor shipping market conditions due to falling freight rates will negatively affect their business performances.
There is no sign of shipping freight rates’ recovery to the level of those during a boom in the shipping industry in the COVID-19 era. Shipping freight rates significantly impact shipping companies’ business performances. As the shipping market continues to go downhill, it is expected that it will take a considerable amount of time for HMM’s creditors to promote the sale of HMM again.
Earlier, HMM’s creditors -- Korea Development Bank and Korea Ocean Business Corporation -- were unable to resolve differences with Harim Group, which was selected as a preferred bidder. The differences involved how to solve perpetual bond issues and a five-year restriction on the sale of HMM shares, so all bets were off.
In the meantime, HMM’s sluggish business performances and uncertainties in the shipping industry are expected to spark disagreements in the market over the price of HMM.
“As a recession in the shipping industry is in full swing and HMM is feeling the heat, many experts say that Korea Development Bank and Korea Ocean Business Corporation have missed the timing of the sale,” a shipping industry insider said. “I expect HMM’s creditors to face a big challenge in promoting the sale of HMM again for the time being.”