South Korea’s Samra Midas Group (SM Group), the owner of bulk carrier Korea Line Corp., is hoping to assume Hanjin Shipping’s 54 percent stake in the Long Beach Terminal in California jointly with its local rival Hyundai Merchant Marine Co. to share the cost of purchase and maintenance.

According to multiple sources from the shipping industry on Wednesday, SM Group has recently informed the government that it would like to acquire half of the 54 percent stake in the Long Beach Terminal sold by Hanjin Shipping, once the world’s seventh largest shipper that went under court receivership, if the bigger Hyundai Merchant Marine now under ownership of state-run lenders would shoulder the other half.

About two weeks ago, the Seoul court handling reorganization of bankrupt Hanjin Shipping chose Korea Line as the preferred bidder to buy Long Beach Terminal along with other Hanjin Shipping assets including Asia-United States operation. The court is yet to propose a purchasing price of the terminal to Korea Line.

If Korea Line accepts the court’s price proposal, it would become eligible to acquire all 54 percent stake in the Long Beach Terminal, but industry observers note that it would be difficult for the bulk carrier to financially secure an estimated 400 billion won ($342.4 million) for the port terminal. Korea Line hopes the state-run Korea Development Bank which owns Hyundai Merchant Marine could purchase the lucrative terminal essential for cargo delivers to North America to help the Korean shipping industry currently with waned competitiveness after the largest liner went under to later resell the stake to the two shippers.

For joint ownership in the Long Beach Terminal, it needs consent from Hyundai Merchant Marine and support from the government. SM Group is pinning hope for government support so that it will be able to efficiently utilize Hanjin Shipping workforce and operation network that it has already acquired for 3.7 billion won. Owning part of a stake in the Long Beach Terminal would be crucial for the bulk carrier to maximize operations.

An unnamed official from SM Group said that a joint purchase of the Long Beach Terminal with Hyundai Merchant Marine would be a win-win for all as it will allow it to more easily operate Hanjin Shipping’s previous Asia-U.S. route while at the same time it will pave the way for Hyundai Merchant Marine to join the 2M shipping alliance.

By Kim Jung-hwan

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]