A combination of Hanjin Shipping and Hyundai Merchant Marine, the two largest ocean shipping companies in South Korea, could, at least for the time being, rank as the fifth largest container carrier worldwide, but they have few ships on order.
A merger of Korea’s two major container shipping companies, Hanjin Shipping and Hyundai Merchant Marine (HMM), is still a possibility, according to press reports reports today.
An article in the Korea Times quoted Financial Services Commission (FSC) Chairman Yim Jong-yong as saying at a news conference, “Once the normalization program for the two shipping companies is wrapped up, the government will consider various plans including the merger of the companies.”
The Yonhap news agency, meanwhile, quoted Yim as saying, “Creditors will decide on whether to allow the two shipping companies to
go on as separate business entities or to merge them together in one
company depending on their rehabilitation efforts.”
Korea Times said the restructuring programs at the two firms means state-run Korea Development Bank (KDB) will be the controlling stakeholder of both companies and the government could force a merger.
Yim was quoted as saying HMM’s normalization effort has “turned the corner,” but the company still faces an uphill battle, which includes tasks such as joining THE Alliance, a new vessel sharing agreement formed by Hanjin and five other container carriers — Hapag-Lloyd, MOL, NYK, “K” Line, and Yang Ming.
“Hanjin’s process is in its early stages and creditors are doing their utmost to assist its self-rescue efforts,” Yim also said, according to the Korea Times.
According to ocean carrier scheduled and capacity database BlueWater Reporting, following the merger of Chinese lines COSCO and CSCL and the purchase of APL parent NOL by CMA CGM, Hanjin and HMM will sport the seventh and 14th largest global containership fleets, with 684,393 TEUs and 413,266 TEUs capacity respectively, when owned and chartered tonnage are included.
A merger would catapult them into fifth place behind Maersk, MSC, CMA CGM-APL, and COSCO China Shipping, and ahead of Evergreen, and Hapag-Lloyd. Evergreen, however, with 40 ships on order and Hapag-Lloyd which is talking about a merger or some sort of business cooperation with UASC could leapfrog them in the near future. In contrast, Hanjin has no ships on order and HMM only two ships with combined capacity of 20,162 TEUs, according to industry research firm Alphaliner.
Korea Times said there has been talk about a potential merger of the two carriers since November and quoted Korea’s Ministry of Oceans and Fisheries as saying, “The number of flag-carrying shippers is not important and what matters is cargo volume,” showing a change from its initial stance that “there must be two shippers.”
Yonhap also reported prosecutors on Sunday filed for an arrest warrant for a former head of Hanjin Shipping Co. accused of illegally selling company stocks in April by misusing insider information.
It said Choi Eun-young has denied the allegations while being questioned by prosecutors last week, saying she sold the stock in question to pay debts.
Korean government to consider merger of Hanjin, HMM
