[THE INVESTOR] The South Korean government on Aug. 31 said it will seek ways for Hyundai Merchant Marine to take over some of Hanjin Shipping’s profitable assets, including vessels, network and key personnel.
“Hanjin Shipping’s court receivership decision raised concerns that it will weaken the competitiveness of South Korea’s shipping industry,” Financial Services Commission Vice Chairman Jeong Eun-bo said.

“We will actively seek ways for HMM to take over Hanjin Shipping’s healthy assets, including vessels, operations, network and staffs that contribute in creating profit.”



His remark came at an emergency meeting of related government agencies, including state-run Korea Development Bank and Financial Supervisory Services, convened in Seoul to discuss measures against the Hanjin Shipping fallout.

The shipper has already sold its core assets to its affiliates since May.

Hanjin Transportation, an affiliate of Hanjin Group, has purchased 59 percent stake in Pyeongtaek Container Terminal, 50 percent stake in Hanjin Newport, operating rights of eight Asian routes and 21.3 percent stake in Tan Cang Cai Mep International Terminal in Vietnam to secure liquidity.

The remaining vessels and operating rights will likely to be sold to its rival HMM, in an effort to reduce further backlash, the government officials said.

The officials reasserted Hanjin Shipping’s court decision will have limited impact on the financial institutions as lenders already assigned reserves to cover potential loan losses.

According to industry insiders, however, the collapse of South Korea’s largest container carrier will be a further blow to its contractors and the already troubled shipping industry.

If the ship carrier is dismantled, it could cause the local shipping industry a maximum of 17 trillion won in damages, according to a study by the Korea Shipowners’ Association.

Hanjin Shipping on Aug. 31 reached an agreement to file for court receivership following the creditors’ decision that halted financial support the previous day.

By Ahn Sung-mi (sahn@heraldcorp.com)