Hyundai Merchant Marine Co. (HMM) being groomed by the government to replace bankrupt Hanjin Shipping as South Korea’s principal sea flag carrier is in talks with U.S. retail giant Walmart for carriage contract, said its chief executive.

The U.S. big-box store which used to be Hanjin Shipping’s client has been looking for a substitute to deliver its cargos on the Pacific route since Hanjin went under, Yoo Chang-keun, chief executive officer of HMM told reporters on Wednesday.

Shippers usually seek out shipping contracts in March and April.

“Because we had been restructuring last year, ship owners have been worried about our financial state. But since we recovered investment grade (BB) on our debt, and the ratio of debt has been decreasing, we are now invited to bid for contracts,” he said.

HMM’s credibility would rise as it would be a member of the world’s largest shipping alliance 2M as well as a local alliance from this year.

The stricter clean-energy regulations on ships would help the company as it would be running a fleet of less-carbon-emitting vessels, he said.

HMM would use the slew of government’s new shipping subsidy program to order five medium-sized container ships and five very large crude carriers (VLCCs) within the year.

The government is mulling to inject 750 billion won ($657 million) in fresh funding in HMM through a ship bank created by state lenders. It created a fund and shipping bank to buy new vessels and lease them to shippers in an aim to help both shipbuilding and shipping industry battling with protracted slump in global demand.

HMM came under state lender’s management last year through debt workout arrangement while Hanjin Shipping was placed under court receivership.

At 2:00 p.m. Thursday in Seoul trading, shares of HMM were 8,120 won, up 60 won or 0.74 percent.

By Kim Jung-hwan and Kang Young-woon

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