Logistics And Frieght Forwarding

Maersk, MSC to Charter Nine Former Hanjin Ships

By Costas Paris in Copenhagen and Friedrich Geiger in Berlin Updated Oct.

27, 2016 10:44 a.m. ET

HSH Nordbank said on Thursday Maersk Line would charter six container ships of Hanjin Shipping[1] Co. for a long term while people involved said Mediterranean Shipping Co. would charter three additional vessels of the troubled shipping company. The unit of A.P.

Moeller-Maersk[2] A/S will in the future operate the six vessels, which have a capacity of 13,100 standard containers each, in a deal arranged by the German bank. HSH Nordbank had financed the six ships for Hanjin and had a vital interest in them, said a spokesman. A syndicate of banks, of which HSH Nordbank was part, when a total of nine ships were financed for Hanjin, chartered three ships out to MSC, according to people involved.

Delivery of the vessels will start in December, one person said.

“The chartering of the container ships by Maersk Line means that, in a difficult setting, these ships have been given a long-term perspective following the insolvency of Hanjin,” said Ulrik Lackschewitz, chief risk officer of the Hamburg-based bank.

The nine Hanjin ships are currently worth around £90 million each. They are among the best vessels in the Hanjin fleet and their loss is a strong indication that the South Korean carrier will not return to its former status as a global carrier. The Wall Street Journal reported earlier this month that Hanjin would reach out to Maersk 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[3], Hanjin was the world’s seventh-biggest container-shipping operator by capacity.

Hanjin is being chopped up and sold as part of a restructuring plan[4]. If Seoul’s bankruptcy court accepts the plan, Hanjin plans to emerge as a 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[5], 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 workforce.

A second person involved in the asset sale said Korean peer Hyundai Merchant Marine[6] Co. 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[7] Co. and LG Electronics[8] Corp.

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 costas.paris@wsj.com[9] and Friedrich Geiger at friedrich.geiger@wsj.com[10]

References

  1. ^ Hanjin Shipping (quotes.wsj.com)
  2. ^ A.P.

    Moeller-Maersk (quotes.wsj.com)

  3. ^ filing for bankruptcy protection in August (www.wsj.com)
  4. ^ part of a restructuring plan (www.wsj.com)
  5. ^ close its 10 European offices (www.wsj.com)
  6. ^ Hyundai Merchant Marine (quotes.wsj.com)
  7. ^ Samsung Electronics (quotes.wsj.com)
  8. ^ LG Electronics (quotes.wsj.com)
  9. ^ costas.paris@wsj.com (www.wsj.com)
  10. ^ friedrich.geiger@wsj.com (www.wsj.com)



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