The Seoul bankruptcy court in charge of reorganizing Hanjin Shipping is selling the cargo carrier’s Far East-North America service, the world’s busiest sea trade route, along with its other marketable assets, and they could fall under the hands of its domestic rival Hyundai Merchant Marine Co., which is also under state-led credit management.

The Seoul Central District Court last Friday put up public notice inviting bidders for Hanjin Shipping’s interests in the Far East-North American sea route and port and other logistics service and infrastructure involved, seven overseas units, five containerships, and concerning workforce.

Hyundai Merchant Marine plans to hand in letter of intent and conduct due diligence to determine what assets could help its business.

Letters of intent are due by Oct. 28 and formal bids by Nov. 7. Samil PricewaterhouseCoopers is leading the sale.

The Far East-North America is the world’s busiest sea route and generates over $3 billion annually for Hanjin Shipping. The shipper has been the third major in the sea route with a share of 7.39 percent after Taiwan’s Evergreen (10.2 percent), and Denmark’s Maersk (9.0 percent). Hyundai Merchant takes up a mere 4.5 percent of the route, ranking 13th.

Financial authorities have previously indicated that it would have Hyundai Merchant Marine, which also fell under state-run Korea Development Bank through debt-to-equity swap relief, acquire key assets of Hanjin Shipping to protect national interests as sea trade is strategically pivotal to the export-reliant economy.

But the problem is that most of the vessel, port, and logistics services on the route would overlap with Hyundai Merchant’s operation.

Industry observers believe Hyundai Merchant could instead bid for containerships and its local rival’s overseas units and terminals.

Hanjin Shipping has hoped to shed 350 workers by next month, but the union maintains the workforce should stay unchanged until progress is made in sales procedures.

By Kim Jung-hwan

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