SM Group, owner of South Korea’s shipping company Korea Line Corp., may propose a joint acquisition of Hanjin Shipping’s 54% stake in a container terminal at California’s Long Beach to another shipping company, Hyundai Merchant Marine (HMM), local media reports.
Last week, Korea Line signed a KRW 37 billion (USD 31.4 million) agreement to buy the Asia-US route network from the bankrupt Hanjin Shipping and has been seeking to buy a stake in the firm’s terminal.
Hanjin’s stake in terminal operator Total Terminals International (TTI), which operates two facilities in Long Beach and Seattle, is estimated at more than KRW 400 billion (USD 342.5 million).
The joint acquisition is said to be a win-win solution for both companies, with Korea Line operating the line and HMM using it as leverage to join the 2M alliance.
Korea Line needs its own terminal to avoid troubles in shipping operations in the face of competition with rival carriers, according to an official at SM Group.
HMM would reportedly need financial support from its creditor, Korea Development Bank (KDB) to buy Hanjin’s stake.
Korea Line, which filed for court receivership five years ago, was acquired by SM Group in 2013. The company’s fleet is currently comprised of 25 ships carrying goods such as iron, ore, crude oil and cars. In addition, the company has 4 newbuildings on order, according to data provided by VesselsValue.
World Maritime News Staff