The Seoul Central District Court has announced that Hanjin, South Korea’s largest shipping line, has recently signed a provisional contract with Swiss-based MSC. This will allow the company to sell off its stake in the Long Beach container terminal in California.
Hanjin, one of the largest container shipping companies in the world, announced last August that it had multi-million dollar debts. It filed for court receivership at the end of August. Since then it has been selling off its principal assets to avoid complete liquidation.
However the deal has not yet been endorsed by either the port authorities or the US court, and is awaiting satisfactory reports before final signing. The Long Beach Board of Harbor Commissioners is currently studying the offer. If approved, it would mean MSC would be the sole holder of the lease at the terminal. This follows the recent sale of Hanjin’s valuable Asia to US shipping route to Korea Line, its biggest rival.
The collapse of Hanjin is having ripple effects throughout the container shipping industry. Danaos, one of the major owners of containerships, had long-term charters with Hanjin on eight of its ships. As rates continue to drop following the collapse and the oversupply, Danaos has admitted to worries about 2017, as 24 of its ships have charters that expire during the year. It may well have to consider scrapping some of its older vessels to remain solvent. It has already had to obtain waivers from some of its lenders on mortgages for current vessels. It has recently submitted a claim to the Seoul bankruptcy court for $598 million for unpaid charter fees, charges and expenses following on from the Hanjin collapse.
CLICK HERE TO RETURN TO OVERVIEW PAGE