Korea Line wins bid in Hanjin bankruptcy sale

SEOUL • Hanjin Shipping's fleet has shrunk to about a tenth of its original size after the South Korean container line returned most of its chartered vessels to owners following its bankruptcy filing.

Yesterday, Korea Line Corp, a bulk carrier owned by the Samra Midas Group, won a bid for some of Hanjin's assets in a bank- ruptcy sale supervised by a South Korean court.

As overcapacity depressed freight rates and Hanjin's debt piled up, lenders pulled the plug on credit, prompting the firm to apply for court receivership on Aug 31.

Hyundai Merchant Marine and Korea Line had submitted final bids for the fire sale.

Korea Line beat bigger rival Hyundai Merchant Marine as the preferred bidder for Hanjin's Asia-United States business, a spokesman for the court said in a text message. Final sale documents will be signed at a later date.

Korea Line offered better terms in its bid, including taking on all employees, the court spokesman said in the text message, without elaborating.

Also included in the bid was Korea Line's interest to buy Hanjin's 54 per cent stake in a port terminal in Long Beach, California, according to the court.

Shares of Korea Line jumped 6.4 per cent to close at 19,000 won (S$23) in Seoul before the court released the information, the biggest gain since Aug 5.

Hanjin was the world's seventh-biggest container line with a market share of 2.9 per cent, making it the only Korean carrier to feature in the global top 10. Now, it has plummeted to 21st in the rankings with about 0.5 per cent share, according to Alphaliner, a shipping data provider.

All but three of Hanjin's remaining 14 ships are either stranded or have been seized over unpaid bills. Hanjin once operated 97 box ships, including 61 that were chartered.

Of the chartered vessels, all except two have been returned to owners, who have since leased them to others and changed the ships' names.

Box ships carry a wide range of goods such as clothes and furniture packed in containers, while bulk carriers ship unpacked cargo including coal and grains.

Maersk Line, the world's biggest boxship operator owned by AP Moeller-Maersk, has said it is among companies that have taken on some of the Hanjin vessels.

Hanjin's bankruptcy filing triggered disruptions in global supply chains ahead of the peak shipping period for the Thanksgiving and Christmas shopping season in the US. The operator said last month that it was winding down its European business and on Nov 10 said it would let go of about 700 crew members.

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A version of this article appeared in the print edition of The Straits Times on November 15, 2016, with the headline 'Korea Line wins bid in Hanjin bankruptcy sale'. Print Edition | Subscribe