South Korea’s troubled shipping company Hyundai Merchant Marine (HMM) has decided to sell its stake in the Busan-based Hyundai Pusan New-Port Terminal Co. in an attempt to return to liquidity, according to a stock exchange filing.
The shipping giant, which owns 50 percent plus one share in the port terminal, said it will sell 40 percent plus one share to the Port of Singapore Authority (PSA) for a price of some USD 85.7 million.
HMM and the PSA are scheduled to sign the contract for the sale on March 23, upon which it will wait for approval from Busan Port Authority before it is finalized.
Furthermore, the shipping company said that, in an attempt to avoid bankruptcy, it launched a self-rescue plan through which it filed for comanagement with its creditors. HMM added that if the creditors decide in favor of the company, HMM’s maturing debts would be rolled over and part of them would be rescheduled.
The Korean Minister of Oceans and Fisheries (MOF) Kim Young-suk earlier this week advised the company not to merge with its compatriot Hanjin Shipping as he told The Korean Economic Daily that the merger “would be a huge loss for the Korean shipping industry if we lose one of them that has maintained its hard-won membership.”
The news comes on the back of the rejection that HMM recently received from its creditors.
Namely, the company received a cold shoulder as its creditors refused to support HMM’s plan for a debt payment delay. Following the rejection, the state-owned Korea Development Bank (KDB) said it would enter into a three-month maturity extension on HMM’s loans.
HMM, which has loans of KRW 382 billion (USD 334 million) maturing in 2016 and KRW 606bn (USD 530m) in 2017, is on the course to report five consecutive years of operating losses.
World Maritime News Staff