On Monday, the bankrupt container carrier Hanjin Shipping disclosed that it was taking 25 percent off the price for its Pacific route business, which was due to be sold to bulker operator Korea Line later this week. The price correction put the value of a modified group of businesses at $23 million, down from $31 million. However, on Tuesday, the board of Korea Line’s parent company rejected the purchase altogether – an unexpected upset in Hanjin's restructuring proceedings.
The scope of the proposed sale was restricted to Hanjin’s Pacific routes and related business operations, and it did not include vessel assets. Stakeholders reportedly voted against it due to the board’s concerns that Korea Line lacks experience in the container business, and that the industry as a whole faces difficult conditions. However, the sale may still go through despite stakeholders' objections, thanks to a clause allowing Korea Line to bypass the meeting decision, an unnamed official told Yonhap.
According to American Shipper, Korea Line’s parent company SM Group may move forward by setting up a separate entity – SM Lines – to operate Hanjin's Pacific routes, rather than using the existing Korea Line brand.
Hanjin filed for bankruptcy at the end of August, citing challenging business conditions and an inability to meet its obligations. Its collapse created massive ripple effects throughout the trans-Pacific container industry, with $14 billion in cargo and over 70 ships stuck at sea while waiting to unload. Given the damage to Hanjin's business operations, the South Korean division of global accountancy firm PricewaterhouseCoopers (PwC) has recommended the carrier's full liquidation. “Liquidating Hanjin is more economically viable than letting it continue business on a going concern basis,” the firm said in a court filing in December.
Hanjin has until February of next year to submit a rehabilitation plan to the court overseeing its receivership; however, the court has already begun auctioning off the line’s major assets, which are worth a combined total of about $1.5 billion.