Asia/Pacific News
Korean Government Mulls Hanjin-HMM Merger
The South Korean government Monday said that it will consider a merger of two of the countries' largest shipping companies, Hanjin Shipping Co Ltd (Hanjin) and Hyundai Merchant Marine (HMM), as soon as the two companies' management has been normalised, local media reports.
As Ship & Bunker reported in March, Drewry Maritime Equity Research (Drewry) has said a merger between HMM and Hanjin would boost the two struggling companies' chances of survival.
"Once the normalisation program for the two shipping companies is wrapped up, the government will consider various plans including the merger of the companies," Yim Jong-yong, Chairman of the Financial Services Commission (FSC) told media Monday.
Last week, Ship & Bunker reported that HMM has said its debt adjustment process is now at the final stage, with its debt ratio forecasted to drop to 226 percent by the end of this year and its charter negotiations to be concluded as quickly as by the end of this week.
"HMM's normalisation effort has turned the corner, though the company still faces tasks such as joining the alliance," said Yim.
"Hanjin's process is in its early stages and creditors are doing their utmost to assist its self-rescue efforts."
Data from Alphaliner shows that, with a total combined capacity of 1,025,403 TEU, a HMM-Hanjin tie up would result in the creation of the fifth largest container carrier in the world and the second largest in Asia.
In November, the South Korean government downplayed a claim that it was looking to force a merger between the two companies, citing "a need to maintain the existence of the two companies when considering the impact a merger could have on South Korea's import and export-oriented economy and global shipping alliances, as well as Busan port's transshipment competitiveness."
