South Korea’s largest, and the seventh biggest container carrier in the world by capacity, Hanjin Shipping Co. (KRX:117930), might be sold off after all. A court in the country is currently considering selling the entire line. The Seoul Central District Court has asked a meeting of officials to evaluate this container line.
Hanjin Shipping is deep in debt. A month back, Hanjin’s filing for bankruptcy had roiled supply chains across the world. The company had finally submitted for court receivership on August 31.
The court now wants to initiate the sale as soon as possible. However, the court observes that whether the sale actually happens will depend on the prevailing market conditions.
There could be other options as well for the ailing shipping line. Judge Choi Ung says that we will do the best thing for rehabilitating the company. Hanjin will be sold off only if we are convinced that it’s the best decision. A final decision will be reached soon.
A committee has been established to look into the matter. The final outcome of the committee is expected to come out sometime in November.
Maersk Could Take Over Hanjin Shipping
Meanwhile, there is speculation that Maersk (CPH:MAERSK-B) of Denmark could be purchasing the ailing Hanjin Shipping. Earlier, there were reports that this Danish business conglomerate could also purchase Hanjin’s rival and smaller Hyundai Merchant Marine Co., which too is debt ridden, and currently being restructured.
Hyundai Merchant is the second biggest sea container shipper. Korea Development Bank, the biggest shareholder of Hyundai Merchant is asking for a quick solution.
The stock of Hanjin Shipping (KRX:117930) soared about 20 percent on September 27 with the news of Maersk takeover coming through. The Hanjin stock closed at 1,185 KRW, up 18.85 percent. But during the day, the stock had gone up by 28.8 percent, before profit taking brought it down. On Wednesday too, the stock surged 10.13% to close at 1,250.
It’s Best That a Shipping Company Takes Over Hanjin
The South Korean court had earlier observed that a shipping line should purchase Hanjin instead of an investment fund, thus promoting speculation that Maersk might come in. The court said that only a shipping company has the expertise to help Hanjin survive. And indeed, Maersk does have the financial strength and expertise to bring back both Hyundai Merchant Marine Co. and Hanjin and run these two companies.