Hanjin Shipping Co Ltd is looking for bidders for its vast Asia to U.S. network less than 60 days after the firm applied for court receivership after racking up total debts thought to be in the region of $5 billion.
According to a statement by the company on Wednesday, Hanjin will receive letters of intent up to the end of October concerning the sale of its main business.
Global industry overcapacity, tough competition and relatively low freight rates have taken their toll on Hanjin over the past year and experts believe that they will not be the only shipping firm to be pulled into the murky depths of receivership.
According to shipping data provider Alphaliner, Hanjin dropped to 18th place in the container ship capacity global rankings as of the start of this month, and creditors started to make claims soon after that.
The statement went on to detail the assets Hanjin would put up for sale, which includes six of their container ships, a dozen overseas businesses, all operations involved in the Asia to U.S. shipping route and manpower systems. A spokesman for the company did not comment on potentially interested buyers or exact prices for the assets, saying it was confidential.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management said Hanjin’s bankruptcy “has started to affect West Coast ports in the U.S. and especially the Port of Long Beach” where container volumes plummeted 17 percent in the second week of October.
“When a company that contributes 10-15 percent of a ports total containerised volume goes bust, you are going to feel reverberations in the local community. Dockers are pretty nervous right now in Long Beach,” Poulson added.
One likely interested party would be Korean firm Hyundai Merchant Marine. The company’s CFO said the firm would need to carefully review Hanjin’s books before putting in any firm offers for the shipping line, but Hanjin was definitely on their radar.
