Korea Line to Take Over Hanjin's Asia-US Route
South Korea’s Korea Line has been picked as the preferred bidder to buy the troubled shipper Hanjin Shipping’s Asia-US operations, beating Hyundai Merchant Marine, reports Reuters.
The judge at the Seoul Central District Court, which is handling Hanjin’s insolvency proceedings, awarded Korea Line the first right to purchase the assets of Hanjin’s Asia-U.S. route, as well as its stake in a California terminal.
The court said it chose Korea Line over Hyundai Merchant Marine Co., which had been expected to win. Hyundai Merchant was backed by senior government officials and its main creditors, which said they would promote the company as the country’s largest oceangoing carrier.
The spokesman said Korea Line offered higher prices than Hyundai Merchant Marine, but did not disclose the value of the potential deal.
Hanjin Shipping, the first major shipping line to bear the brunt of a global overcapacity and low freight rates, has put up for sale its US to Asia routes, including manpower systems and five container ships.
Hanjin Shipping’s fleet has shrunk to about a tenth of its size after the container line returned most of its chartered vessels to owners in the weeks following its bankruptcy filing.
All but three of the remaining 14 ships are either stranded or have been seized over unpaid bills. Hanjin once operated 97 box ships, including 61 that were chartered. As overcapacity depressed freight rates and Hanjin’s debt piled up, lenders pulled the plug on credit, prompting the company to apply for court receivership on August 31.