Hyundai Merchant Marine (HMM) may call off plans to sell its dry bulk business division.
South Korea’s second biggest shipping company had invited offers for the unit in March, with Seoul-based SK Shipping and Taiwanese securities firm Yuanta said to be interested.
However, South Korean media recently reported that the sale had been cancelled.
The sale could have netted between KRW600 billion (USD550 million) and KRW700 billion for HMM, which is close to raising KRW3.3 trillion to avert a liquidity crunch.
In a Korea Exchange filing on 22 May, HMM said about the media reports that it was “still examining other solutions and no firm decision has been made”.
The move comes after HMM posted an operating profit of KRW4.2 billion for first quarter 2015, its first operating profit in five years. The company credited its cost-cutting measures and the fall in fuel oil prices for the result.
Related news:HMM posts first operating profit since 2010
However the company remains in the red, with a KRW44.5 billion net loss for the first quarter 2015, which was nevertheless an improvement from the KRW82.8 billion loss year on year.
In December 2013, after being hit by losses for two consecutive years, HMM launched a self-rescue plan that entailed selling its LNG and dry bulk divisions. Its parent company, Hyundai Group, also sold its stakes in Hyundai Logistics and Hyundai Securities to Japanese finance firm Orix.
HMM’s bulk division consists of 13 ships built between 1993 and 2012, while it expects the delivery of six more carriers in 2015, 2016, and 2017. Two Newcastlemax bulkers ordered in 2013 were cancelled recently due to the poor dry bulk market.
Efforts by HMM to sell its stake in two US terminals – CUT (California United Terminals) and WUT (Washington United Terminals) – to US private equity firm Lindsay Goldberg at USD140 million has also been taking longer than expected due to the drawn-out negotiations.