Logistics And Frieght Forwarding

Germany’s HSH Nordbank to Take Nine Hanjin Ships

By Costas Paris Updated Oct.

27, 2016 6:50 a.m. ET

COPENHAGEN–Germany’s HSH Nordbank AG is in the process of taking possession of nine container ships operated by South Korea’s debt-ridden Hanjin Shipping[1] Co. 117930 -2.77 % [2] and plans to lease them to Denmark’s Maersk Line and Geneva-based Mediterranean Shipping Co., the world’s two biggest container-shipping operators, people involved in the matter said.

“HSH is looking to lease six ships to Maersk and three to MSC,” one of the people said. Delivery of the vessels, which each have a capacity to carry around 13,000 containers, will start in December, that person said.

The Wall Street Journal reported earlier this month that Hanjin would reach out to Maersk, a unit of A.P. Moeller-Maersk[3] AMKBY 1.26 % [4] A/S, and MSC to sell at least five of its biggest vessels as it tries to raise funds to unload stranded cargo, pay off creditors and re-emerge as an Asian regional carrier.

Before filing for bankruptcy protection in August[5], Hanjin was the world’s seventh-biggest container-shipping operator by capacity.

The involvement of HSH Nordbank is unclear, but the people involved said it likely had lent money to Hanjin to buy some of the vessels and was taking them back as the Korean operator can’t keep up with payments. HSH Nordbank declined to comment.

Hanjin is being chopped up and sold as part of a restructuring plan[6]. If Seoul’s bankruptcy court accepts the plan, Hanjin plans to emerge asa small operator involved in intra-Asia trades; if not, Hanjin will be liquidated. A decision is expected in December.

Hanjin said on Monday that it would close its 10 European offices[7], including its regional headquarters in Germany.

Separately, the company is in talks with MSC to sell its stake in the Long Beach Terminal in California and has also put up for sale its Asia-U.S.marketing operations. The company, which has total debt of around 6.03 trillion won (£5.3 billion), also plans to slash nearly 60% of its 700 land-based workers. A second person involved in the asset sale said Korean peer Hyundai Merchant Marine[8] Co. 011200 1.19 % [9] also would cherry-pick among Hanjin’s ships.

Both the Korean government and Hanjin’s main creditor, Korea Development Bank, have said they would back HMM in buying Hanjin assets, provided such a move would help it stay competitive. KDB is also HMM’s main creditor.

HMM is looking to secure Hanjin’s slice of moving Korea’s exports to Western markets, but it would need more capacity to keep bigger competitors like Maersk and MSC from winning major shipping contacts from electronics behemoths like Samsung Electronics[10] Co. SSNHZ 0.00 % [11] and LG Electronics[12] Corp. 066570 -2.29 % [13]

Since Hanjin filed for bankruptcy, dozens of its ships have been denied access to ports around the world, while some of them have been seized by the company’s creditors. The disruption to the supply chain has since eased, however, alleviating concerns for retailers in the U.S. and Europe that are stocking shelves for the year-end holiday season.

Korea’s Maritime Ministry said Monday that 81 vessels from Hanjin’s container fleet of 97 ships have finished unloading cargo at ports around the world.

About nine cargo-laden ships remain stranded at sea, while seven ships are heading back to Korea to berth at Busan and other ports, where Hanjin ships can freely unload cargo without the threat of seizure from creditors.

Government officials have said they expect Hanjin container ships to be close to completing unloading by the end of October.

–In-Soo Nam in Seoul contributed to this article.

Write to Costas Paris at [email protected][14]

References

  1. ^ Hanjin Shipping (quotes.wsj.com)
  2. ^ 117930 -2.77 % (quotes.wsj.com)
  3. ^ A.P.

    Moeller-Maersk (quotes.wsj.com)

  4. ^ AMKBY 1.26 % (quotes.wsj.com)
  5. ^ filing for bankruptcy protection in August (www.wsj.com)
  6. ^ part of a restructuring plan (www.wsj.com)
  7. ^ close its 10 European offices (www.wsj.com)
  8. ^ Hyundai Merchant Marine (quotes.wsj.com)
  9. ^ 011200 1.19 % (quotes.wsj.com)
  10. ^ Samsung Electronics (quotes.wsj.com)
  11. ^ SSNHZ 0.00 % (quotes.wsj.com)
  12. ^ LG Electronics (quotes.wsj.com)
  13. ^ 066570 -2.29 % (quotes.wsj.com)
  14. ^ [email protected] (www.wsj.com)



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