COPENHAGEN/SEOUL - Maersk Line, part of AP Moller-Maersk, said Hyundai Merchant Marine is no longer under consideration to join the 2M vessel-sharing alliance, sending the indebted South Korean firm's shares sharply lower.
Hyundai Merchant Marine, however, said in a statement on Friday that it was still in talks to join the alliance, and would announce the results of the negotiations - which were in their final stages - when they were completed.
Joining an alliance involving major shipping firms was one of the preconditions set out in a debt-restructuring agreement made between heavily indebted Hyundai Merchant Marine and its creditors in May, so any breakdown in the talks could raise serious doubts about the future of what is now South Korea's largest shipping firm.
Its rival, Hanjin Shipping, collapsed earlier this year, at one time stranding US$14 billion (S$19.8 billion) in cargo and sending shockwaves through global trade networks.
The world's two largest container shippers, Maersk Line and Mediterranean Shipping Co (MSC), have been in talks with Hyundai since July about the 2M alliance.
"The parties have discussed the possibility of Hyundai Merchant Marine joining 2M as an operating partner and now decided to look at other cooperation possibilities," Maersk Line press officer Michael Storgaard said in an email. Instead, he said, the parties were discussing the option of partnering with Hyundai through a "slot exchange and purchase agreement", whereby surplus capacity can be shared or traded.
The discussions include the possibility of Denmark's Maersk Line taking over charters and operations of vessels currently chartered to Hyundai with the aim of deploying them in the 2M network, Storgaard said. "Hyundai Merchant Marine needs an alliance, not only for the agreement with creditors but because an alliance is key for a shipper with major international routes to secure business volume," said a shipping analyst who declined to be identified before the talks had been concluded.
"Joining an alliance is also symbolic of Hyundai Merchant Marine's health as a shipper as it undergoes debt restructuring."
Hyundai Merchant Marine reported operating losses of 647.3 billion won (S$787.09 million) between January-September this year, and has 2.9 trillion won in debt as of end-September, according to a company filing.
A spokesman for Korea Development Bank, lead creditor bank for Hyundai Merchant Marine, said the talks were ongoing and it would clarify its position after they had finished.
Hyundai Merchant Marine shares fell 6 per cent as of 0425 GMT(12.25 noon Singapore time), compared with a 0.4 per cent drop in the wider market , paring some losses after plunging as much as 11.6 per cent earlier on Friday.