SEOUL, Nov. 22 (Korea Bizwire) – Hanjin Shipping Co. said Tuesday it has decided to sell parts of its container shipping businesses, including the U.S.-Asia route and related assets, to Korea Line Corp. for 37 billion won (US$31.4 million) as it struggles to secure much needed cash.
In a regulatory filing, Hanjin, once the country’s No. 1 shipper, said it would hand over its Pacific shipping route business and related customer management and operation information, and subsidiaries and logistics management systems in the U.S., China, Vietnam and four other countries.
The asset sale will be completed on Jan. 5, the filing noted.
Under the deal, 574 employees of Hanjin Shipping will also continue to work for Korea Line.
Earlier this month, Korea Line, the country’s No. 1 bulk carrier, was picked as the preferred bidder for the U.S.-Asia route, the shipper’s lucrative asset.
Korea Line is affiliated with SM Group after being taken over by the second-tier business group in 2014. SM Group’s business portfolio ranges from construction to chemicals.
In addition to the U.S.-Asia route, Korea Line was given a chance to bid for Hanjin’s stake in the Port of Long Beach, California.
But the latest deal does not include the one regarding the sale of the terminal operator.
Hanjin Shipping owns a 54 percent stake in Total Terminals International (TTI), which operates two facilities in Long Beach and Seattle, and handles some 30 percent of cargo along the U.S. West Coast.
The shipper’s Asia-U.S. route logs sales of up to 4 trillion won annually, and its market share stands at 7 percent, the sixth largest among global shippers.
Hanjin Shipping, currently under court receivership, has been seeking to sell its assets in an effort to survive an industrywide slump and cash shortage. Hanjin Shipping and local shippers have been under financial strain due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy.