Bulk shipping company Korea Line Corp. has been picked over Hyundai Merchant Marine to acquire Hanjin’s operations between Asia and the United States.
Korea Line Corp. has been picked as the preferred bidder for the assets of Hanjin Shipping’s business between Asia and the United States, beating out Hyundai Merchant Marine (HMM), according to media reports.
The deal comes as a surprise: Korea Line is a bulk shipping company and is not currently operating containerships.
After Hanjin filed for court receivership on Aug. 31, Korea’s Financial Services Commission directed HMM, which at the time had been the second largest container carrier in South Korea after Hanjin, to form a task force to review a possible acquisition of Hanjin’s assets.
According to Korea’s Yonhap News Agency and other media reports, the Seoul Central District Court said a final deal for the Hanjin acquisition will be signed Nov. 21.
The Korea Joongang Daily said, “The court’s initial sale list included five vessels, related crew members and networks on Hanjin’s Asia-U.S. route as well as seven of the company’s overseas subsidiaries.”
Yonhap reported that in addition to the Asia-U.S. route, Korea Line has bid for Hanjin’s 54 percent stake in the Total Terminals International facility at the Port of Long Beach, which Hanjin co-owns with Mediterranean Shipping Co.
According to its website, Korea Line has 29 owned ships – 19 bulkers, eight gas carriers, one tanker and one pure car/truck carrier. For 63 percent of its business, Korea Line acts as a dedicated carrier for some of Korea’s biggest companies – the steelmaker POSCO (formerly known as Pohang Iron and Steel Co.), Korea Electric Power Corporation (KEPCO), Korea Gas Corp. (KOGAS), and Hyundai Glovis, the logistics affiliate of Hyundai Motors.
Bloomberg said it was told by a spokesman that “Korea Line offered better terms in its bid, including taking on all employees.” However, Hanjin has been laying off workers since it filed for bankruptcy protection and stopped booking cargo.
Yonhap said, “Korea Line has expressed its intention to offer job security for some 700 land and sea-based employees working for Hanjin Shipping.”
It’s not clear how many of those workers might be in the United States.
According to the Korea Joongang Daily, Korea Line was acquired in 2013 by the Samra Midas Group, a company that appears to be keen on expansion in the shipping industry.
Earlier this year, Samra Midas reportedly considered buying part of SPP Shipbuilding, but then decided to walk away from the deal, according to the Korea Herald.
Korea Line’s website said it has taken delivery of six vessels this year.
NEWS FLASH: Korea Line wins bid for Hanjin’s Asia-U.S. operations
