South Korean carrier Hanjin Shipping is looking at selling its stake in its Busan terminal operations as it continues to struggle with a weak container freight market.
In June 2013, cash-strapped Hanjin sold half its stake in Hanjin Newport, which runs the terminal, for USD264.6 million to private equity fund IMM Investment.
Hanjin Newport began operations during Phase 2-1 of Busan New Port’s development in May 2009. The terminal operator counts Yang Ming, ‘K’ Line, COSCO, Evergreen, Hapag-Lloyd, NYK, KMTC Line, and its parent company among its customers. The 696,300 m² terminal has a 1.1 km-long quay.
Hanjin Shipping said in a Korea Exchange filing that while it is considering the possibility of selling its remaining stake in Hanjin Newport to improve its liquidity, no decision had yet been made.
Media reports said Hanjin Shipping hoped to raise KRW150 billion (USD131 million) from the sale.
The revelation comes just after Hanjin Shipping admitted on 2 October that it is looking to sell its 22.2% stake in H-Line Shipping, a move that would all but end its association with LNG and dry bulk shipping. This transaction would also net KRW150 billion.
H-Line was formed in June 2014, when Hanjin spun off its dry bulk and LNG shipping businesses for USD298 million. Hanjin retained a 22.2% stake and private equity firm Hahn & Company bought the remainder.
Local media reports say that Hanjin’s need to secure more funding has only gained urgency after it failed to sell its container terminal in Algeciras, Spain.
The company’s problems were exposed in late 2013 after two consecutive annual losses. Its affiliate Korean Air gained control of the company through a KRW400 billion capital injection, which saw the airline’s boss Cho Yang-ho becoming Hanjin Shipping’s CEO as well.
This post was sourced from IHS Maritime 360: View the original article here.
