Hanjin Shipping Co. has drawn two final bids, including one from Hyundai Merchant Marine Co., for the assets of its Asia-U.S. route and its stake in a California terminal, as the beleaguered company is broken up as part of a restructuring plan.
Hyundai Merchant, South Korea’s largest shipping line, and Korea Line Corp., a smaller operator of dry bulkers and liquefied-natural-gas carriers, said Thursday they have submitted proposals to acquire Hanjin’s trans-Pacific assets.
In their proposals, both companies also expressed their intention to purchase Hanjin’s 54% stake in Total Terminals International LLC, which runs Long Beach Terminal in California.
The bidders declined to provide further details, such as bidding prices for Hanjin’s assets.
A judge at the Seoul Central District Court, which is handling Hanjin’s insolvency proceedings, confirmed the two bids. He said the court plans to choose a preferred buyer by Monday and sign a formal contract by Nov. 21.
A total of five shipping companies and equity funds had presented their initial bids last month to acquire Hanjin’s trans-Pacific assets, including its container ships, business network and the workforce involved in running the Asia-U.S. route.
The sale process may herald the beginning of the end of Hanjin, which filed for receivership in late August, disrupting supply chains around the world.
Hyundai Merchant, which is owned by state-owned Korea Development Bank, is trying to expand its fleet to compete with bigger rivals such as Denmark’s Maersk Line and Geneva-based Mediterranean Shipping Co. on the route, one of Asia’s main links to Western markets.
The South Korean government has said it would back Hyundai in buying Hanjin’s assets, provided the purchase would help the shipping company stay competitive.
Hanjin, once the world’s seventh-largest container operator by capacity, is under court order to cut its workforce, sell its own ships and return chartered ships to their owners.
A Hanjin spokeswoman said Thursday it plans to fire almost all of its 700 seafarers by the end of the year. The Korean company, whose debt totals around 6.03 trillion won ($5.3 billion), also plans to reduce its land-based workforce of 700 by nearly 60%.
Hanjin said last month that it would close its 10 European offices, including its regional headquarters in Germany, fanning speculation that Korea’s once No. 1 shipper will be liquidated or forced to become a much smaller regional operator after the sale of major assets.
Source: Wall Street Journal