South Korean ocean carrier Hyundai Merchant Marine is backing out of a joint bid with MSC for Hanjin’s 54 percent stake in the largest container terminal at the Port of Long Beach, according to a report from the Wall Street Journal.
South Korean ocean carrier Hyundai Merchant Marine (HMM) is backing out of a joint bid with Mediterranean Shipping Co. (MSC) for a controlling share of port operator Total Terminals International LLC (TTI), according to a report from the Wall Street Journal.
TTI leases and operates Pier T in Long Beach, Calif., the largest container terminal at the Southern California port, and Terminal 46 at the Port of Seattle.
HMM and MSC earlier this month submitted a joint offer for the now insolvent Hanjin Shipping’s 54 percent stake in TTl, and MSC is now expected to continue those efforts on its own. HMM plans to eventually purchase a minority stake from MSC in the future, should the deal go through.
“Considering our low credit ratings, we thought it would be better for MSC to make a solo bid. We agreed to buy a stake from MSC later,” HMM CEO C.K. Yoo told the Wall Street Journal in an interview. “We intend to get a low double-digit stake in the terminal, which we need to save costs for cargo unloading.”
Hanjin is selling its interest in TTI as part of the rehabilitation process being administered by a bankruptcy court in Seoul following its filing for court receivership in August. MSC’s container terminal subsidiary, Terminal Investment Limited (TIL), is already the effective holder of 50 percent of TTI.
The latest news comes shortly after HMM announced it had joined up with MSC and 2M Alliance partner Maersk Line in a slot exchange agreement on the major east-west trades. Although the agreement is technically outside the scope of the 2M Alliance VSA, HMM will purchase slots on 2M vessels and Maersk and MSC plan to take over operation of some of HMM chartered vessels.
According to Yoo, due to the collapse of Hanjin, HMM now carries nearly two-thirds of U.S. import cargoes from Korean firms like Samsung and LG.
Report: HMM withdraws bid for TTI
