High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
Hanjin Shipping, South Korea’s largest shipping company, announced in a stock exchange filing today that it will be merging itself back into its parent company, Hanjin Shipping Holdings Ltd.
In 2009, Hanjin Shipping was divided into Hanjin Shipping Holdings, a company focused on managing the subsidiaries, and Hanjin Shipping Company, which maintained full operational control over the existing shipping business.
This announcement follows the spinoff of 29 bulk carriers and 7 LNG carriers at the end of the December helping to reduce the company’s indebtedness by KRW 300 billion… a much-needed cash boost after incurring a 2013 net operating loss of KRW 242.4 billion.
A 76 percent stake in the venture was sold to private equity firm Hahn & Company, while Hanjin Shipping retained 24 percent.
Hanjin Shipping is still deeply in debt however, a situation that is felt strongly by majority shareholder Korean Air which is looking to sell KRW 400 billion in assets in order to cut Hanjin Shipping’s debt ratio from 800 percent to 400 percent.
The merger is planned for June 2014.
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