SEOUL, Dec. 1 (Korea Bizwire) – Hyundai Merchant Marine Co., a leading shipping line in South Korea, is expected to strike a deal this month to join the world’s largest container-shipping alliance, the country’s top financial regulator said Thursday, dismissing reports of trouble in last-minute talks.
“Negotiations are likely to be completed around Dec. 10,” Yim Jong-yong, chairman of the Financial Services Commission (FSC), said at a press briefing, citing direct information from the Seoul-based shipper.
If reached, the deal would allow Hyundai to operate as a member of the 2M Alliance starting in April next year and boost its desperate efforts to stay afloat amid multibillion-dollar debt.
The 2M group handles 28 percent of the global sea container cargo, made up of Maersk Line and Mediterranean Shipping, which are the world’s No. 1 and No. 2 container lines, respectively.
Hyundai has been in talks with 2M on its membership bid for months. Some foreign media recently reported that the negotiations could fail due to backlash from 2M customers.
Regarding another local shipper Hanjin Shipping Co. under court protection, Yim emphasized its fate will be decided by the court, not the government.
Hanjin, once the world’s seventh-biggest container line, has been trying to sell its stake in the Long Beach port terminal and other key assets in a bid to raise funds for survival. Hanjin’s 54 percent stake in the facility is estimated to be worth more than 400 billion won (US$341 million).
Bidders for the stake include SM Group, which owns South Korea’s No. 1 bulk carrier Korea Line Corp., with Hyundai Merchant also reportedly considering buying a partial stake.
Yim said it’s up to Hyundai whether to take part in the bidding either independently or in a consortium, adding what’s more important is that the shipper should stand on its own feet.
“It’s in a difficult situation,” he pointed out. “It has yet to normalize the management.”
Reflecting the results of Hyundai’s talks with the 2M Alliance and Hanjin’s asset sale, the government will finalize a mid- to long-term plan to enhance the competitiveness of the local shipping industry, Yim added.
He also stressed the authorities have dealt with the Hanjin issue in accordance with the principle of corporate restructuring without any political consideration.