South Korean shipping company Hyundai Merchant Marine (HMM) and its compatriot Hanjin Shipping could be merged if they succeed in normalizing their management, The Korea Times cited Financial Services Commission (FSC) Chairman Yim Jong-yong.
The South Korea’s government said that if the companies manage to achieve the goal, it would consider a number of possibilities, one of which would be merging the cash-strapped firms.
The potential merger was mentioned a couple of times before, as last November the government formed a multi-ministry consultative body for restructuring the shippers.
The announcement comes a week after HMM reached a deal with containership owners on 20 percent charter rate cuts and with bulk carrier owners for a 25 percent charter rate reductions. The company initially sought a 27 percent rate decrease.
The cuts are expected to come into force over the next three and a half years, according to HMM.
HMM’s creditor group agreed on the company’s debt restructuring proposal on condition that the shipping firm successfully concludes its negotiations with bond holders and shipowners.
HMM has already gained bond holders’ approval for its debt restructuring proposal, as the company faces a USD 4.48 billion wall of debt.
Additionally, the normalization of the company’s business would pave the way for the struggling firm to join the new global shipping alliance.
Hanjin Shipping also initiated discussions with 22 shipowners on charter rates and plans to meet with bond holders to restructure its debt.
Hanjin is required to make its self-rescue efforts to secure liquidity as HMM did.
World Maritime News Staff